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Sahtu Project

Towards a Sahtu Development Corporation:

A Discussion Paper

Prepared for the Tulita Dene Band Chief Frank Andrew

By Garth Wallbridge

March 27, 2011

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TABLE OF CONTENTS

Page

Chapter 1

Introduction and Executive Summary

4

Chapter 2

Financial and Other Findings from Regional Development

8

Corporations Major Findings

8

Financial Achievements of Regional Development Corporations

10

TABLE 1

Financial Growth of Selected Regional Development Corporations

11

Gwich’in Development Corporation

11

Nunasi Corporation

12

Makivik Corporation

13

Inuvialuit Development Corporation

13

TABLE 2

Inuvialuit Corporate Group Financial Performance 2005-2009

14

TABLE 3

Inuvialuit Subsidiaries Financial Performance 2005-2009

16

Recent Regional Development Corporation Holdings

16

Social Benefits

18

Chapter 3

Native Economic Development: Lessons from Elsewhere

19

The Harvard Project on American Indian Economic Development

19

The Context for Maori Economic Development

20

Chapter 4

A Model of Regional Economic Development

22

FIGURE 1

A Model Economic Development Corporation

22

Chapter 5

Towards A Sahtu Development Corporation

25

Assets and Achievements

26

Governance and Operational Institutions

26

Business Ventures

26

Potential Regional Economic Opportunities

26

Next Steps

28

Conclusions

29

APPENDIX

Development Corporations in Northern Canada and Alaska

32

Inuvialuit Regional Corporation

32

Inuvialuit Development Corporation

33

FIGURE A-1

Inuvialuit Development Corporation Main Holdings

34

Inuvialuit Investment Corporation

35

Inuvialuit Petroleum Corporation

36

Inuvialuit Land Corporation

36

Inuvialuit Corporate Group Financial Performance 2005-2009

36

TABLE A-1

Inuvialuit Corporate Group Financial Performance 2005-2009

37

TABLE A-2

Inuvialuit Subsidiaries Financial Performance 2005-2009

38

Spinoff Benefits

39

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Gwich’in Region

40

Gwich’in Development Corporation

41

FIGURE A-2

Gwich’in Development Corporation Main Holdings

42

Gwich’in Settlement Corporation

43

Gwich’in Business Development Department

43

Spinoff Benefits

44

Tlicho Region

47

Tlicho Investment Corporation

47

FIGURE A-3

Tlicho Investment Corporation Main Holdings

47

Denendeh Development Corporation

48

Denendeh Investments Inc.

49

FIGURE A-4

Denendeh Investments Incorporated Portfolio

50

Dehcho Economic Corporation

51

FIGURE A-5

Dehcho Economic Corporation Main Holdings

52

Akaitcho Regional Investment Corporation

53

Akaitcho Energy Corporation

53

NWT Metis Development Corporation

54

North Slave Metis Alliance

54

FIGURE A-6

Metcor Inc.’s Main Holdings

55

Sahtu Region

56

Economic Development in the Sahtu Settlement Area

57

FIGURE A-7

Sahtu Region Main Holdings by Community

58

Nunasi Corporation

58

Structure and Holdings

61

FIGURE A-8

Nunasi Corporation Main Holdings

62

Spinoff Benefits

65

James Bay and Northern Quebec Agreement (1975/1978)

67

Makivik Corporation

68

FIGURE A-9

Makivik Corporation Main Holdings

69

James Bay Crees

70

Yukon Umbrella Final Agreement

72

Labrador Inuit Land Claims Agreement

74

Labrador Inuit Development Corporation

74

FIGURE A-10

Labrador Inuit Development Corporation Main Holdings

76

Nunavik Inuit Land Claims Agreement (2006)

77

Innu Nation

78

Osoyoos Indian Band Development Corporation

78

FIGURE A-11

Osoyoos Indian Band Development Corporation Main Holdings

80

Alaska Native Claims Settlement Act

81

Arctic Slope Regional Corporation

82

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CHAPTER 1. Introduction and Executive Summary

The focus of this discussion paper is on regional economic development in northern Canada, mainly in regions with settled land claims. The paper examines the role being played by economic development corporations in building regional economies and strengthening the social well-being of land claims beneficiaries. The efforts being made in regions without settled land claims are also part of the survey.

The main focus is on the regional development corporations in the Northwest Territories. The Inuvialuit, Gwich’in, Tlicho, and Sahtu regions (all with settled claims) are examined, as are efforts in Nunavut, Northern Quebec, Yukon, Labrador, and Alaska. The work of the Osoyoos Indian Band in British Columbia, recognized internationally for its excellence, completes the descriptive portion of the paper. The land claim final agreements contain many common features, but within those common features each region has created an economic development model with distinctive elements that other regions could learn from and possibly use to their own advantage.

The reader is encouraged to look for these features in the descriptions of each economic development corporation in the Appendix. Chapter 2 presents a summary of the findings. For comparative purposes, the paper examines research into native economic development from the United States and New Zealand. The research findings, presented in Chapter 3, identify the underlying, foundational requirements for successful native economic development. This analysis helps us to understand why some regions are more successful than others in building businesses, employment opportunities, and wealth for their people.

Research by the Harvard Project of Harvard University identifies three main elements for successful native economic development: sovereignty, institutions, and culture. They later added an additional two elements: leadership and strategic thinking. The land claim final agreements in northern Canada meet the first three conditions. Comprehensive claims recognize the sovereignty of the claimant groups, and create the basis—and the funding— on which to build social and economic institutions that respect the cultural values of the claimant group. Where leadership and strategic thinking are also present, success is more likely to happen and to grow over time. Spinoff benefits are also likely to increase.

The New Zealand Treasury Department, in a recent discussion paper prepared at the request of the Maori for a national assembly, found that an agenda for Maori economic

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development should focus on three factors: developing people, developing enterprises, and developing assets. Above all, the paper argues that the single most important factor in determining the success of Maori economic development over the next 20 years will be initiatives that improve the education and skills of Maori people—sound basic education of youth leading to skill training, employment and higher incomes, and opportunities for people to learn on the job as workers, business operators, managers, or administrators. Enterprise development and asset development flow from this skill development.

Both the Harvard Project and the New Zealand Treasury stress the importance of separating the institutions of economic development (and the funding they require to build enterprises and capital assets), from the political functions of aboriginal governments.

Starting from these basic factors and the strong features of the northern economic development corporations, it is possible to propose a “best practices” model for a regional aboriginal economic development corporation. Chapter 4 does that.

Some of the main features of this model economic development corporation include the following:

Governance institutions that include sole ownership of the economic development corporation by the regional authority, that operate fairly and impartially, and that keep all business and investment activities separate from the political activities of the regional authority;

Goals and objectives that include support for the traditional economy as well as business development;

A business development strategy that includes essential local services, participation in regional industrial projects, and, resources permitting, investments in national and even international enterprises with joint venture partners;

A strong emphasis on education, training and skill development, and opportunities for beneficiaries to learn on the job through employment in the Settlement Area;

Close monitoring of investments and flexibility in responding to opportunities and challenges in the economic environment;

Non-competitive alliances and multiple partnership arrangements with other aboriginal partners to provide essential services across regions;

Scope of activity that includes professional support for small and isolated communities, and investment in community-based projects; and

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Relations with government that ensure a financial stake in government projects on Settlement Area lands and participation with government and industry in planning forums and major developments.

The final chapter looks at the assets and achievements of the Sahtu region to date and makes a brief environmental scan of the potential economic opportunities in the region that would make it advantageous for the Sahtu Dene and Metis to have a regional development corporation.

A brief environmental scan is enough to indicate that the Sahtu region, and each of the Sahtu communities, is situated in an area of high non-renewable resource potential for large-scale industrial development (and potential local spinoff projects). A decision on the Mackenzie Gas Pipeline Project is expected by 2016. A decision to build the pipeline would surely spur continued exploration work in the region, for which some beneficiaries already have training. It would also provide contracting opportunities for Sahtu-owned businesses supplying helicopter, heavy equipment, expediting and camp services, and opportunities for ongoing maintenance contracts. Construction of the pipeline would almost certainly be accompanied by government action to extend the Mackenzie Valley Highway, creating similar opportunities.

Mining activity in the region is also promising and likely to continue, and steps to develop hydroelectric power schemes and/or technologically sophisticated alternative energy projects are already being taken. With five areas of ecologically and culturally important land being actively reviewed for designation as Historic Sites, and a sixth one having been proposed, every community in the region has potential opportunities for eco-tourism and heritage development, land and resource management, and scientific research potential to take advantage of.

The evidence presented in this discussion paper suggests that one institution that would put the region in a stronger position to take advantage of these opportunities is missing. A regional development corporation would allow the communities to pool existing financial resources and managerial capacity and, if need be, to hire external expertise to undertake region-wide projects and support future community-based ventures. A Sahtu Development Corporation would be able to engage industry in negotiations involving major projects within the Settlement Area, speaking with one voice for the entire region. It would be able to do the same with the federal and territorial governments.

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When all of the existing assets and achievements to date, and the potential opportunities for the future are taken into consideration, it is reasonable to conclude that one remaining institutional piece should be put in place to strengthen the Sahtu’s capacity for economic development—a Sahtu Development Corporation. It is anticipated that the community- based economic development corporations within the Sahtu will both be able to realize a large volume of work, revenue and profits from their involvement in a region-wide corporation, while continuing to have control of the local work they now have on the go.

One of the lessons to be taken from this survey paper is that a critical mass of financial and human resources makes a difference. A regional body operating with a larger pool of capital, managed by experienced professionals, has more resources for responding to regional and community needs and opportunities over smaller, local enterprises operating alone. A regional economic development corporation is also more likely to have influence with government and industry than individual communities.

Another lesson learned is that the benefits of regional development build up over time, creating wealth that gives a region the flexibility to take advantage of new opportunities, and the resourcefulness to deal with setbacks. That has been the experience for the Inuvialuit, for Nunasi Corporation, the Makivik Corporation and the Alaska North Slope, and for other regions with more recent settled land claims. Whatever problems might arise in the short term, from the longer term the Sahtu could look back and see how far it has come.

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CHAPTER 2. Financial and Other Findings from Regional Development Corporations

This chapter summarizes the findings from the review of the regional development corporations found in the appendix to this report. Readers interested in the background information on which these findings are based, or have an interest in one or more of the regions surveyed, can go to the appendix. The activities of ten regions with settled land claims in Canada and Alaska are summarized there, plus the NK’Mip Band in Osoyoos, British Columbia, as well as efforts by the Dene and Metis of the NWT in regions without settled claims, and by the Innu of Labrador.

Sahtu has most of the institutional features found in other regions—a settled claim, compensation funding and Trust Fund, regional and local councils, and local development corporations. The one piece that is missing is a regional economic development corporation. The question to address then becomes, what have other regions accomplished through their development corporations that might be beneficial for the Sahtu?

Major Findings

1. Broadly speaking, all of the settled land claims have the same goals and objectives—to develop their economies, improve the social wellbeing of their people, and protect their land. This is true for Canada and Alaska, and elsewhere in the United States and New Zealand, reviewed in Chapter 3.

2. Employment and business revenues (wealth generation) are the keys to achieving economic and social goals and objectives.

3. Human capacity building—preparing land claim beneficiaries for jobs at all levels in an organization as workers, managers, and business owners, beginning with basic education—is key to economic success. Learning on the job occurs at all levels in the workplace and is arguably just as important to success as education and training. (See more on the role of education, training and workplace learning in Chapter 3).

4. A critical mass of financial and human resources makes a difference. A regional approach to economic development allows financial and human resources to be pooled to develop regional initiatives and support community-based activities. The Inuvialuit Development Corporation is a good example of this.

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5. The joint venture partnerships that regional development corporations enter into, often with large and experienced industrial corporations, are not just a means to participate in profitable business operations; they are also an important means of achieving knowledge transfer to beneficiaries. The Gwich’in Development Corporation describes its approach this way: “We look for partnerships that promise to deliver profits for both partners, training for our people and sustainable development for our land.”

6. Every region that was surveyed has major industrial activity occurring within the region or potentially occurring in the near future, and most of the regions surveyed are participating in these major projects, as well as providing essential services through local and regional business ventures.

7. Connections with industry matter. As one example, the Labrador Inuit of Nunatsiavut own the company that manages the mining and camp services at the Voisey’s Bay nickel mine. Their example demonstrates the potential for land claims beneficiaries to become significant participants in an industrial megaproject through their development corporation.

8. Preservation of the value of the heritage fund against inflation is the minimum, essential objective; growth of the heritage fund to meet the social needs of a growing population and to generate wealth for future projects is the goal of investment management. (See Table 1 below.)

9. Professional management of land claims capital transfers must be in place to ensure that investment portfolios accumulate wealth over time. Sound practice involves:

Close monitoring of investments with frequent review and reporting against an investment earnings target;

Delegation to more than one professional investment advisor;

Simple, understandable annual reports to beneficiaries, laid out in a consistent format that shows year-to-year trends (something the Inuvialuit do very well).

10. Regions often struggle at first with their business ventures before they become stable and consistently profitable. The James Bay Crees of Northern Quebec, and the Inupiat of the Alaska North Slope, are both candid about their business growing pains.

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11. Separation of business activities managed by a development corporation from the political and related responsibilities of the land claim organization is an important principle. The Gwich’in and the Osoyoos Band are very clear about this.

12. There are no limits to the types of ventures a regional development corporation can enter into, from local essential services (e.g., groceries, fuel distribution or hotels), to regional and national services and industrial ventures (e.g., regional and mainline air carriers, mining and manufacturing), to public utilities and sophisticated technologies (e.g., the Tlicho’s $30M investment in a hydro-electric dam, digital networks and telecommunications systems), and specialized ventures (e.g., pharmaceuticals research by Makivik Corporation, venture capital management by the Inupiat of the Alaska North Slope).

13. Being small does not prevent success. The NK’Mip Band of Osoyoos, BC fully exploits the potential of its small land base and is recognized internationally as a model for native economic development. The Innu Nation of Labrador, without a land claim and representing just 2,200 people in two communities, has been successful in winning financial and other concessions from industry and government.

14. Clear development goals make a difference. The Arctic Slope Regional Corporation, whose lands are rich in natural resources, puts it this way: “ASRC is committed to developing these resources and bringing them to market, in a manner that respects Inupiat subsistence values while ensuring proper care of the environment, habitat and wildlife.”

15. Time matters. The benefits of regional development build up over time, creating wealth that gives a region the flexibility to take advantage of new opportunities, and the resourcefulness to deal with setbacks and economic downturns.

Financial Achievements of Regional Development Corporations

The data available for the Inuvialuit and Gwich’in, the James Bay Inuit and Nunasi Corporation make it possible to see how business operations conducted over time can result in substantial net financial growth—wealth generation to support the future aspirations of beneficiaries.

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The data from Table 1 demonstrate how the four regions for which financial information is readily available have been successful in generating, and maintaining, substantial wealth for their beneficiaries, in spite of setbacks caused by the recession of 2007-2009.

TABLE 1 Financial Growth of Selected Regional Development Corporations

Region

Year

Amount

Received

Beneficiaries

Communities

Recent

Compensation

Over

(Approximate)

Net Worth

Inuvialuit

1984

$169,500,000

14

years

4,000

6

$362,500,000

 

(2009)

Gwich’in

1992

$141,000,000

15

years

2,400

4

$115,300,000

 

(2010)

Nunasi*

1976

$1.173 billion

14

years

25,000

26

$1.115 billion

1993

 

(2009)

Makivik**

1975

$90,000,000

25

years

10,000+ Inuit

14 Inuit

$180,000,000+

 

(Nunavik)

* Nunasi was founded in 1976 on borrowed money, all of which was repaid by 1992. The Nunavut land claim was settled in 1993.

** The James Bay Agreement of 1975 was for a total of $225 million paid over 25 years to 16,000 Crees and more than 10,000 Inuit. The Naskapi of northeast Quebec joined through the Northeast Quebec Agreement in 1978. The Makivik Corporation’s portion of the compensation package came to $90 million.

Gwich’in Development Corporation The Gwich’in Final Agreement illustrates the point. It provided tax-free capital transfers in annual installments totaling $141 million over 15 years, less repayment of the negotiation loans of $8.1 million. The final payment in 2007 resulted in a net balance in the Gwich’in Settlement Fund, called Gwich’in Legacy Capital, of $134.7 million. This amount exceeded the original fund objective of $132 million.

Due to the global recession, Gwich’in Development Corporation assets decreased from $49.8 million in 2008 to $36.5 million in 2009. Shareholder equity dipped slightly over the same period from $2.2 million to $2.1 million, and revenues decreased from $6.6 million in 2008 to $5.9 million in 2009. A small loss in 2009 followed a larger one of more than $6 million in 2008. Given the uncertain economic environment and delays in the Mackenzie Gas Project, the GDC is looking for investment opportunities outside the Gwich’in Settlement Area.

The 2006-2007 Annual Report of the Gwich’in Settlement Corporation describes how the GSC has actively revised the management of federal capital transfers over the years, especially since 1996, to maximize return on investment. Steps taken include the

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establishment of an Investment Committee, the retention of an external investment advisor, the establishment of an investment policy that governs how the fund is invested and managed, and periodic review of the investment mix by the Investment Committee, resulting in changes. The 2009-2010 Annual Report of the GSC notes that since 1996, when the fund was first actively managed, the fund has returned approximately 6.4% annually, 0.2% ahead of the policy benchmark. However, the fund slightly underperformed its benchmarks for the four-year period ending in 2010. With losses due to the recession, the Gwich’in Legacy Capital stood at $115.3 million in 2010, representing a shortfall from the inflation-adjusted level of $139.5 million.

Nunasi Corporation Nunasi Corporation, established in 1976, pre-dates the settlement of the Nunavut Land Claims Agreement in 1993. 1 Nunasi’s purpose was to support Inuit to take a prominent place in the world of Canadian business. Originally, Nunasi Corporation was financed through debt financing secured through the proposed land claim. The loan was fully repaid in 1992, a year before the land claim was settled.

Payment of the Capital Transfer from the Government of Canada to the Nunavut Trust was made in 14 annual payments for a total of $1.173 billion, less repayment of negotiation loans of $39.7 million by TFN. The final payment was made in 2007.

In fiscal year 2009, the Inuit Trust reported investment income of $38.8 million and a distribution to beneficiaries of $33.6 million on investment assets totaling $1.115 billion. The Inuit Trust also declared dividends of approximately $463,000. By that same year, Nunasi Corporation had declared dividends since 1999 of over $3 million.

Over the course of its growth, Nunasi has entered into numerous joint ventures with other Aboriginal development corporations across northern Canada which have regional importance or national scope. The investment arms of these regional bodies, including the three Regional Inuit Associations of Nunavut, often have extensive investments of their own. The result is a complex web of holdings and relationships. Nunasi’s flagship

1 Back in 1976, the Inuit Tapiriit of Canada, now known as the Inuit Tapiriit Kanatami or ITK, created the Inuit Development Corporation as the development arm of the yet to be formed territory of Nunavut. ITK also formed an organization called the Tunngavik Federation of Nunavut (TFN) to negotiate the land claim agreement. Shortly after that, TFN renamed the Inuit Development Corporation Nunasi Corporation.

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partnership is the equal partnership with the Inuvialuit in the NorTerra Group of companies. Nunasi also partners with the Gwich’in Development Corporation, the Denendeh Development Corporation, the Yukon Indian Development Corporation, Makivik Corporation, Sakku Investment Corporation in the Kivalliq Region, and the Labrador Inuit Development Corporation.

By recent count, Nunasi’s wholly owned subsidiaries included seven companies operating retail, helicopter, education and training, and security and courier services. Its joint ventures involve companies and groups of companies, some of which operate their own subsidiaries—44 companies in all—for a grand total of 53 subsidiaries on the Nunasi organization chart.

Makivik Corporation Makivik Corporation is a non-profit entity. It receives, administers, distributes and invests the compensation money payable to Nunavik Inuit. The initial $90 million paid out under the compensation package more than doubled over 30 years. Makivik is also now receiving the $86 million capital transfers and associated funds due under the Nunavik Inuit Land Claim Agreement (2007) to create the new Nunavik public government, while $55 million will fund the Nunavik Inuit Trust to make disbursements to individual Nunavik Inuit.

An internal Investment Review Committee (IRC) is responsible for ensuring that Makivik’s capital fund grows over time for use by future generations. The IRC is an advisory group to the Makivik executive which administers and invests the capital fund in stocks, bonds and money markets; reviews joint venture projects or proposals including the creation of new subsidiary companies and loan request applications; and recommends the annual budget to the Makivik directors based on the projected rate of return from financial investments. The IRC meets monthly while an investment group monitors the fund and tracks investment activities daily.

Inuvialuit Development Corporation The year 2009 was the twenty-fifth anniversary of the Inuvialuit Final Agreement. Since 1984 the Inuvialuit:

Have successfully built up the real value of their heritage fund;

Earn large after-tax profits most years;

In spite of a substantial loss in 2009 due to the global recession, continue to enjoy substantial wealth as a collective body;

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Provide significant levels of employment for beneficiaries and a major wage package in the region;

Fund the operations of the six community corporations;

Fund social programs of value to beneficiaries and make charitable donations from the revenues earned by development corporation businesses;

Provide spinoff benefits such as community cleanups, cultural and youth projects and community events;

Earn the trust of government departments and agencies, which become more willing to entrust program funding to the IRC. Operational success earns trust and creates the conditions needed for continuing success.

Table 2 summarizes the overall financial operations of the Inuvialuit subsidiaries in the Inuvialuit Corporate Group over the most recent five-year period. The table shows that the Inuvialuit were generating substantial after-tax earnings up until 2008, when the global recession took hold. In spite of the reduced earnings in 2008 and the loss incurred in 2009, the minimum cash payout to beneficiaries of $400 each was maintained for those years, and was much higher in previous years. (In fiscal year 2000, after-tax earnings reached $52,500,000 and the individual payout to beneficiaries was $850 each.) The individual payouts to beneficiaries give every Inuvialuit an incentive to take a serious interest in IRC’s activities in the regional, national, and international economy.

TABLE 2 Inuvialuit Corporate Group Financial Performance 2005-2009

Year

After Tax

Beneficiary Distribution

Earnings

(Losses)

Total

Individual

Beneficiaries

2009

($17,346,000)

$1,595,600

$400.00

3,989

2008

3,824,000

1,565,000

400.00

3,912

2007

35,179,000

3,816,155

1,001.09

3,812

2006

36,459,000

2,869,470

770.12

3,726

2005

19,545,000

1,744,651

477.99

3,650

   

Direct Benefits to Beneficiaries

 
 

Employee

From ICG

Equity in ICG

Contribution

Wages

Resources

Agreements

2009

$12,629,242

$17,879,299

$362,584,000

$11,000,000+

2008

13,786,608

21,102,222

381,841,000

11,600,000

2007

13,467,600

20,285,992

382,216,000

8,600,000

2006

11,470,148

17,345,371

350,234,000

8,700,000

2005

11,411,625

18,151,624

315,825,000

6,000,000

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Direct benefits to beneficiaries have been in the range $17-21 million over the five-year period. Employee wages ranged from $11 million to nearly $14 million annually of that amount. The remainder was expended on a variety of community projects, support for education and elders, and donations of various kinds within the region. Total equity in the Inuvialuit Corporate Group declined somewhat in 2009 from a high in 2007, but remains more than double the original land claims settlement at $362.5 million.

Besides its direct business and investment activities, IRC’s organizational and managerial strengths make it an attractive partner for the federal and territorial governments. Both levels of government have raised the amounts in their contribution agreements recently to support wellness and social development programs and capacity-building efforts in the ISR.

Table 3 breaks down the results for the three profit-earning members of the Inuvialuit Corporate Group for the years 2005-2009. The Inuvialuit Land Corporation seldom reports earnings.

The table records the impact of the 2007-2009 recession on the revenues, profits, wages and employment numbers, and donations made by the Inuvialuit Development Corporation (IDC). IDC had revenues of $221 million in 2009, the worst year of the global recession, when it recorded an after-tax loss of nearly $15 million. That represented a major decline from 2006, when IDC turned a profit of more than $19 million. In spite of the recession, wages paid to beneficiaries remained at nearly $8.7 million in 2009, paid out to 290 beneficiaries, and donations exceeded $700,000.

The Heritage Fund managed by the Inuvialuit Investment Corporation, the returns from which fund the administration of the Inuvialuit Regional Corporation and the community corporations and other expenses, recorded a decline in earnings to $1.9 million in 2008 and a loss of $6.4 million in 2009, well down from the typical earnings of previous years in the $8-$10 million range. Benchmarks for earnings set on a four-year evaluation period were also brought down sharply for 2008 and 2009. Close monitoring of investments, however, has kept the rates of return close to, or above, the targets.

The slowdown in oil and gas exploration prompted the Inuvialuit Petroleum Corporation to sell off southern business interests several years ago and invest the proceeds through IIC

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pending better opportunities. Portfolio earnings for the Inuvialuit Petroleum Corporation

are not reported separately from the IIC returns.

TABLE 3

Inuvialuit Subsidiaries Financial Performance 2005-2009

Year

 

Inuvialuit Development Corporation

 
 

Revenue

After Tax

Wages Paid to Beneficiaries

Beneficiaries

Donations

Profit (Loss)

on Payroll

2009

$221,146,000

($14,995,000)

$8,690,502

290

$732,000

2008

309,396,000

2,713,000

10,020,000

391

467,000

2007

268,984,000

13,115,000

9,970,000

430

1,114,000

2006

229,314,000

19,403,000

8,400,000

Not reported

1,400,000

2005

187,605,000

8,346,000

Not reported

200 full-time

1,600,000

equivalent

positions

 

Inuvialuit Investment Corporation Heritage Fund

Inuvialuit Petroleum Corporation

 

Net Market

Profit (Loss)

Return

Target

Portfolio

Earnings

Value

(4-yr

IIC/Ikhil*

avg)

2009

$181,926,000

($6,380,000)

3.0%

3.1%

Earnings

$89,000

down

2008

146,932,000

1,904,000

0.8%

1.2%

Earnings

1,387,000

down

2007

197,860,000

9,275,000

10.3%

10.6%

Not reported

2,975,000

2006

195,000,000

10,505,000

14.1%

12.4%

Not reported

2,975,000

2005

176,300,000

7,969,000

10.8%

11.3%

Not reported

Not reported

* Following the sale of IPC’s southern business interests, the proceeds were invested in IIC. IPC also owns

a one-third share in the Ikhil Natural Gas Project which supplies Inuvik.

 

Recent Regional Development Corporation Holdings

A scan of the Appendix will demonstrate the unlimited range of business ventures the

regional development corporations own outright or have majority, equal, or minority

shareholdings in. Major sectors of the economy in which development corporations have

holdings include: civil and industrial construction; energy development (oil and gas, hydro

development and transmission); hospitality and tourism (hotels, motels, lodges, travel

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agencies); real estate and property management (residential, offices, commercial, industrial); retail (groceries, fuel, hardware); transportation (regional and mainline air carriers, inland and marine barging and shipping, trucking).

A range of businesses support the mining and oil and gas sectors: engineering and environmental services; logistical and expediting services (road and air freight handling); helicopter charters; remote camp services; winter road construction; labour supply; heavy equipment; welding and equipment repair; specialized concrete for underground operations (North Slave Metis); and others. The Labrador Inuit of Nunatsiavut illustrate the extent to which a development corporation can be active in a major mining project. Through its subsidiary Torngait Services Inc., the Labrador Inuit Development Corporation is a major player in the development and operation of the Voisey’s Bay nickel mine. Torngait Services, in partnership with ATCO Frontec, built, operates and supervises the Voisey’s Bay camp, is responsible for on-site engineering and equipment operation, drilling and mine mill operations, employee supervision and general labour supply. A recent five- year contract valued at $47.5 million provided employment for 65 employees, of whom 70% are aboriginal.

The Tlicho entered into a joint venture with ATCO Frontec in 1999 to supply goods and services to the diamond mining industry outside Yellowknife. After only six years the Tlicho bought out ATCO Frontec. At the time they had 300 employees and $55M in revenues according to newspaper reports.

Many specialized sectors of the economy are obvious choices, or present specific opportunities in various regions: forestry in northern Quebec and Labrador, shrimp and turbot fishery in Nunavik and Labrador, hydro generation for the James Bay Crees and Tlicho, power transmission for the Akaitcho and Metis, fire management in the Tlicho and Sahtu, sealift operations, fur tanning, adventure tourism cruises, quarrying, commercial agriculture (vineyards and winery as part of a multi-faceted resort and recreational development at Osoyoos); petroleum refining and distribution (Alaska North Slope).

Some business ventures are meant to enhance the quality of life for beneficiaries: medical boarding homes in several locations; a pharmacy in Cambridge Bay serving the community and Kitikmeot region and another pharmacy in Rankin Inlet serving the Kivalliq region; education and training services in several regions (classroom or workplace based); preschool and daycare (Osoyoos).

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Sophisticated technology is not beyond the development corporations. PanArctic Inuit Logistics Corporation (PAIL) operates the North Warning System on behalf of the Department of National Defence, in partnership with ATCO Frontec. Seven Inuit development corporations are equal owners of PAIL: the Inuvialuit, Nunasi, Makivik, Labrador Inuit, Qikiqtaaluk Corporation, Sakku Investments Corporation, and Kitikmeot Corporation. Several regions are also involved in bringing high-speed broadband digital service to 57 northern communities through the Broadband Business Alliance Limited Partnership (BBALP) contract with SSI Micro: Denendeh Investments Inc., Tetlit Gwich’in Council, Deline Land Corporation, Dehcho Economic Corporation, Tlicho Investment Corporation, and Akaitcho Regional Investment Corporation.

Social Benefits A regional development corporation stands to create more and better jobs for Land Claims beneficiaries. Better jobs mean better incomes and benefits and employment opportunities for workers. When development corporations develop new businesses they also develop the talent pool within their region. They stimulate the development of skilled workers, administrators, and entrepreneurs. The creation of skilled workers, administrators, and entrepreneurs is dependent on people having the opportunity to gain experience and learn on the job.

Research has shown that good jobs and incomes are related to a variety of direct and indirect benefits for individuals and communities. These real and potential benefits include:

Improved family nutrition;

Improved mental health;

Improved incentives for young people to stay in school and acquire postsecondary education and skill training;

Improved work experience and job mobility for workers;

Reduced dependency on Income Support;

Reduced encounters with the criminal justice system;

Improved community-level investments in infrastructure and businesses serving local and regional needs;

Greater local control of economic decision-making and resources and participation in regional industrial activities.

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When regions participate in development activities within their communities, and outside the region as their businesses generate enough income to do so, they achieve one of the most important benefits of all—the resiliency to withstand setbacks in the economy and the flexibility to minimize hardships and rebound as opportunities arise.

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CHAPTER 3. Native Economic Development: Lessons from Elsewhere

Native economic development matters in other countries besides Canada. Research in two countries with large aboriginal populations is examined briefly here for comparison with Canadian experience. Researchers in the United States and New Zealand have tried to identify the critical conditions for, and the essential elements of, a successful native economic development model.

The Harvard Project on American Indian Economic Development The Harvard Project, based at Harvard University, aims to understand and foster the conditions under which American Indian nations achieve sustained, self-determined social and economic development. The Project operates in association with the Native Nations Institute at the University of Arizona.

Beginning in 1987, through applied research and service activities, the Project has tried to answer three key questions: What works? Where does it work? And Why does it work? The questions recognize that some of the many Indian nations in the USA, large and small, have experienced economic success while others have not.

The research and case studies carried out by the Project identify three key determinants of economic success:

“Sovereignty matters. When Native nations make their own decisions about what development approaches to take, they consistently outperform external decision- makers—on matters as diverse as governmental form, natural resource management, economic development, health care, and social service provision.

Institutions matter. For development to take hold, assertions of sovereignty must be backed by capable institutions of governance. Nations do this as they adopt stable decision making rules, establish fair and independent mechanisms for dispute resolution, and separate politics from day-to-day business and program management.

Culture matters. Successful economies stand on the shoulders of legitimate, culturally grounded institutions of self-government. Indigenous societies are diverse; each nation must equip itself with a governing structure, economic system, policies, and procedures that fit its own contemporary culture.”

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Two additional key factors were added later:

“Leadership. Nation building requires leaders who introduce new knowledge and experiences, challenge assumptions, and propose change. Such leaders, whether elected, community, or spiritual, convince people that things can be different and inspire them to take action.

Strategic thinking. The Indian nation has moved away from crisis management and opportunistic, quick-fix responses to development dilemmas and toward long-term decision-making that incorporates community priorities, concerns, circumstances, and assets.”

These five factors do not guarantee success, but they make it more likely. The researchers suggest that where these key determinants are in place, assets such as education, natural resources, access to capital, and location in respect to markets are more likely to pay off. On the other hand, where some of these five factors are not in place, the other assets are likely to be wasted. The researchers conclude that businesses that are protected from political interference are more likely to be profitable than those that are not.

The Context for Maori Economic Development The New Zealand Treasury prepared a background paper by this title in 2005, at the request of the Maori people for an important assembly (Hui Taumata in the Maori language). The Maori, located throughout the islands, represent significant numbers and wealth in the New Zealand economy, although lagging the non-Maori majority in ways similar to Canada and the United States. Maori economic development is understood as a key contributor to the national, export-based economy, with prospects for growing participation in the Asian and global economy.

The Maori represent 15% of New Zealand’s population. Settlement of claims for confiscated Maori lands made since 1992, a process which still continues, has given the Maori ownership of significant portions of New Zealand’s export industries and thereby makes them important contributors to the national economy. One settlement, for $170 million, gave the Maori control of at least 20% of New Zealand’s lucrative fishery quota. Other large settlements have given the Maori an important stake in agriculture and forestry, also important sources of export earnings. Maori contribution to the country’s Gross Domestic Product rose from less than 2% in 2003 to 5.4% in 2006, making them important

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international players. At that time, Maori commercial assets, privately and collectively owned, were valued conservatively at $16.5 billion.

The Treasury analysts identify five key drivers of Maori economic development:

Skills and talent;

Innovation and technological change;

Investment;

Entrepreneurship; and

Sound institutions.

From these five drivers the Treasury Paper identifies three key considerations in developing an agenda for Maori economic development: developing people; developing enterprises; and developing assets (which may involve dealing with tensions over the appropriate use of collectively owned lands and resources).

The paper picks out people as the key determinant of Maori economic development over the next 20 years—whether as employees, owners, governors, managers or elders—and whether acting individually or collectively. “The most significant contribution to Maori economic development over the next 20 years is likely to come from improving the education and skills of Maori people. The effects of such improvements are likely to be wide-ranging and long-lasting. They include increased access by Maori to employment and higher incomes, the effective governance and management of Maori enterprises, and the sustainable development of Maori commercial assets.”

The entrepreneurial skills—leadership, management, and governance—in part involve achieving a balance between commercial management skills and traditional leadership skills. Also required is balancing stakeholder involvement in decision-making with the need to respond promptly to opportunities and risks.

The paper echoes the findings of the Harvard Project. “The economic activities of individuals and enterprises can be either supported or discouraged by the rules, systems and institutions that exist in society. There is a need to focus on these institutional “foundations” for economic development, and ensure that they provide an environment in which people and businesses have incentives to improve their economic participation and productivity. Governments play a key role in this regard, but so do the formal and informal rules, systems, values and institutions that exist within Maoridom.”

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CHAPTER 4. A Model of Regional Economic Development

The comprehensive land claims settled by aboriginal peoples in northern Canada meet the criteria for success identified in Chapter 3: sovereignty, institutions, and culture. The terms of the final agreements recognize sovereignty through ownership of land and resources and through financial compensation. Control over land and resources, and substantial federal transfers of money, create the potential for sound institutional development. The final agreements set out terms that support the disciplined management of the funding transferred to run those institutions. Where careful investments are made, even in the face of major setbacks like the recent global recession, beneficiaries can be confident that over time their wealth will grow, their social needs will be addressed, and their institutions will function in ways that support cultural values and aspirations and inspire confidence. Where leadership and strategic thinking are also present, social and economic success are more likely to happen than where they are missing.

The regional development corporations in each region have good features that other regions can learn from and possibly use to their advantage. These features are grouped in the model below under Governance, Goals and Objectives, Business Development Strategy, Scope of Activities, and Role of Government. Regions whose website information places a strong emphasis on certain features are noted.

Figure 1 A Model Economic Development Corporation

Governance

Regional emphasis

Feature

 

Inuvialuit

The Development Corporation, as a birthright corporation, is a wholly-owned subsidiary of the aboriginal government.

Gwich’in

Tlicho

Nunasi

James Bay

Nunatsiavut

Inuvialuit

The business and investment activities of the Development Corporation are separated from the aboriginal government’s political activities through an independent board of directors appointed by the aboriginal government.

Gwich’in

Tlicho

Nunasi

Osoyoos

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Governance

Regional emphasis

Feature

 

Gwich’in

Governance policies and practices are clear and impartial and clearly communicated to beneficiaries and industry seeking access to Settlement Area lands.

Gwich’in

Clear standards are set which beneficiary-owned businesses must meet to be eligible for contracts with industry or government.

Inuvialuit

Investment policy includes benchmark rates of return and dispersed professional management and oversight of the investment portfolio.

Gwich’in

Nunasi

Gwich’in

Community economic development initiatives are also managed by an independent board of directors where community economic development corporations exist.

Tlicho

All communities in the region are represented on the board of directors, and the board chair is a beneficiary. Non-beneficiaries with relevant expertise may be appointed to the board.

Yukon

Economic development plans are required.

Goals and

All regions

Social as well as economic development, with concern for protection of land, culture and quality of life.

Objectives

 

Most regions

Support for the traditional economy as well as for business development and wealth creation.

All regions

Emphasis on education, training, and skill development for beneficiaries.

Business

Most regions

Ownership of local and regional ventures.

Development

Strategy

 

Larger, wealthier regions

Focus on and investment in regional industrial projects, multi-region northern services, and national ventures of regional significance.

Most regions

Mix of majority ownership, equal ownership and minority investment with joint venture partners.

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Business

Regional emphasis

Feature

Development

Strategy

 

Inuvialuit

Aboriginal joint ventures with majority, equal, or minority ownership in businesses aimed at meeting specific needs of beneficiaries.

Gwich’in

Nunasi

Denendeh DC

Non-competitive alliances and multiple partnership arrangements with other aboriginal partners to provide essential services needed across regions.

Denendeh DC NWT Metis Nation

Commercial lenders

North Slave Metis

Targeted industrial investments and training.

Tlicho

Combination of traditional skills with education and training.

Nunatsiavut

Nunatsiavut

Operational control in industrial megaprojects through ownership and joint ventures.

Alaska North Slope

Aggressive approach to exploiting the region’s non-renewable natural resources.

Scope of Activities

Inuvialuit

Professional advice to and direct investments in community-based initiatives.

Inuvialuit

Flexible investment practices in response to economic conditions.

Dehcho

Regional advisory and educational support for small and isolated communities.

Osoyoos

Tightly integrated utilization of the region’s natural and human resources to meet business, cultural, and educational objectives.

Role of

Nunatsiavut

Commitments from governments to planning and participation in megaprojects.

Government

Innu

Yukon

Gwich’in, Sahtu, James Bay, Yukon

Contracting provisions

Nunavik

Access to fisheries licences and quotas and overlap agreements with Nunavut, Crees, and Labrador Inuit.

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CHAPTER 5. Towards A Sahtu Development Corporation

Chapter 2 describes the economic development corporations created by land claim settlements in northern regions. Chapter 3 summarizes research findings that identify the essential foundations of successful aboriginal economic development. And Chapter 4 presents a conceptual model of a regional economic development corporation taken from the two preceding chapters. It remains to make an assessment of the Sahtu’s readiness to move forward and develop a regional development corporation of its own.

This chapter looks at the assets and achievements of the Sahtu region to date and makes a brief environmental scan of the potential economic opportunities in the region. The purpose is to assess the region’s capacity to exploit those opportunities, and to identify the benefits of a regional economic development corporation.

Settlement of the land claim in 1993 confirmed the sovereignty of the Sahtu Dene and Metis and established the financial and institutional means to build the governance and operational institutions needed to achieve self-sufficiency in the region—through culturally appropriate programs and services to reach social and economic objectives.

The governance institutions support operational institutions in the communities. The community-based land and financial corporations have developed local and regional business ventures, and joint venture partnerships, some of which are partnerships between the local economic development corporations. These businesses, wholly owned or joint ventures, have been the means to employment, training, and learning on the job opportunities for beneficiaries, and the building of relationships with external industrial corporations active in the Settlement Area.

Chapter 12 of the Land Claim Agreement also commits the federal and territorial governments to support for business development, contracting opportunities, and learning opportunities for beneficiaries through employment, training, and education. In other words, important baseline criteria are in place for developing people, enterprises, and assets.

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Assets and Achievements

Significance

Sahtu Dene and Metis Land Claims Agreement (1993) ratified by Parliament through

Established the sovereignty of the Sahtu Dene and Metis, with surface and subsurface rights to lands in the Sahtu Settlement Area.

the Sahtu Dene and Metis Land Claim Settlement Act (1994)

Provided compensation ($130 million over 15 years) and guaranteed a share of government resource royalties in the Mackenzie Valley.

Identified basic objectives—self-sufficiency, support for the traditional economy, and full participation of beneficiaries in the mainstream economy.

Created the authority and the revenues to build culturally appropriate governance institutions and operational institutions that meet the social and economic needs of beneficiaries.

Governance and Operational Institutions

Regional and local councils and boards with mandates, departments and staff.

Sahtu Secretariat coordinates regional activities, distributes land claims funding, and functions as point of contact for government programs.

Land and financial corporations with mandates, departments and staff.

Participation in co-management boards responsible for land and resource management.

Research and publications capacity.

Memberships and relationships with other regions, national and international bodies.

Websites providing information for each community and enterprise.

Business Ventures

Wholly owned and joint venture partnerships, with local and/or regional focus in each community.

Commitments from federal and territorial governments to maximize local and regional employment and business opportunities (Ch. 12)

Memorandum of Understanding with the Government of the NWT to improve contracting opportunities for Sahtu businesses and training, education, and employment opportunities for beneficiaries (2007- 2012).

Training of beneficiaries for oil and gas exploration jobs and support for education.

Potential Regional Economic Opportunities

Pipeline construction for the Mackenzie Gas Project and ongoing oil and gas exploration.

Mackenzie Valley Highway Extension Project.

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Mining development of the Selwyn Chihong Mining’s lead-zinc project at Howards Pass.

Mining exploration in the Great Bear region.

Hydro-electric for small-scale community projects and pipeline-related industrial use.

Potential for alternative energy developments to replace diesel power generation and reduce power costs. Includes solar and wind power.

Tourism and management opportunities related to the Saoyu/?ehdacho National Historic Site and the five other projects under study or proposed for designation as NWT Protected Areas Strategy sites, and the Canol Heritage Trail.

A brief environmental scan is enough to indicate that the Sahtu region, and each of the

Sahtu communities, is situated in an area of high non-renewable resource potential for

large-scale industrial development (and potential local spinoff ventures). A decision on the

Mackenzie Gas Project is expected by 2016. A decision to build the pipeline would surely

spur continued exploration work in the region, for which some beneficiaries already have

training. It would also provide contracting opportunities for Sahtu-owned businesses

supplying helicopter, heavy equipment, expediting and camp services, and opportunities

for ongoing maintenance contracts. Construction of the pipeline would almost certainly be

accompanied by government action to extend the Mackenzie Valley Highway, creating

similar opportunities.

Mining activity in the region is also promising and likely to continue, and steps to develop

hydro-electric power and/or technologically sophisticated alternative energy projects are

already being taken. With five areas of ecologically and culturally important land being

actively reviewed for designation as Historic Sites, and a sixth one having been proposed,

every community in the region has potential opportunities for eco-tourism and heritage

development, land and resource management, and scientific research potential to take

advantage of.

One question to answer will be: Is the Sahtu currently in a position to best take advantage

of these opportunities as they unfold? The evidence presented in this discussion paper

suggests that one institution that would put the region in a stronger position is missing—a

region-wide Sahtu economic development corporation. A regional development

corporation would allow the communities to pool existing financial resources and

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managerial capacity and, if need be, to hire external expertise to undertake region-wide projects and support future community-based ventures. A Sahtu Development Corporation would be able to engage industry in negotiations involving region-wide major projects within the Settlement Area, speaking with one voice for the entire region. It would be able to do the same with the federal and territorial governments.

When all of the existing assets and achievements to date, and the potential opportunities for the future are taken into consideration, it is reasonable to conclude that one remaining institutional piece should be put in place to strengthen the Sahtu’s capacity for economic development—a Sahtu Development Corporation. It is anticipated that the community- based economic development corporations within the Sahtu will both be able to realize a large volume of work, revenue and profits from their involvement in a region-wide corporation, while continuing to have control of the local work they now have on the go.

One straightforward task that could be assigned to the Sahtu Development Corporation would be to make it the repository of the Sahtu Business List which outside contractors will need to be able to access for the Mackenzie Gas Project.

Next Steps Given the region’s experience negotiating a land claim and building governance and operational institutions with working mandates, the process involved in creating a Sahtu Development Corporation should pose no difficulties. Major decisions and steps would include the following:

1. Hold the already proposed regional leadership workshop to consider the merits of the idea.

2. Consult with the community leadership and community residents to obtain feedback. If it is clear that there is strong support:

3. Hold a regional leadership vote to establish the Sahtu Development Corporation.

4. Nominate individuals to staff and develop the structure and mandate of the new organization.

5. Establish an office.

6. Direct funding into the development corporation for salaries, operations and project development.

Conclusions

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This discussion paper has examined existing land claim agreements to uncover what it is within the operating environments of their regional economic development corporations or similar institutions that might present a model for the Sahtu region. The model presented in Chapter 4 was extracted from the descriptive summaries of eighteen northern development corporations and research findings into the essential foundations of successful aboriginal economic development. The purpose of the survey has been to identify the governance structures, methodologies, and other features that could ultimately increase the region’s capacity to take advantage of economic development opportunities in the Sahtu.

It will be up to the Sahtu leadership to decide whether or not a regional economic development corporation should be created. A simple decision-making model looks at the strengths and weaknesses of an organization, and at the opportunities and threats the organization faces in its operating environment. The assets and achievements to date, and the real and potential opportunities in the region, suggest that the Sahtu has clear strengths and opportunities, while the weaknesses and threats are internal and easy to overcome.

The evidence presented in this paper suggests that a Sahtu Development Corporation would fill an institutional gap and could achieve useful outcomes for Sahtu communities, individuals, businesses, and the existing economic development institutions in the region. It is anticipated that the community-based economic development corporations within the Sahtu will both be able to realize a large volume of work, revenue and profits from their involvement in a region-wide corporation, while continuing to have control of the local work they now have on the go.

The end goal would be to have a suitably sized business to capitalize on big opportunities, such as a Mackenzie Valley Highway Extension or the Mackenzie Gas Project. At the present time any project over a few million dollars goes to contractors from outside the region. It is time for the region to take on this larger work as a collective body. It is time for the Sahtu to become effective players in the big-picture economy of the region.

One of the lessons to be taken from this survey paper is that critical mass of financial and human resources makes a difference. A regional body operating with a larger pool of capital, managed by experienced professionals, has more resources for responding to regional and community needs and opportunities than smaller, local enterprises operating

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alone. A regional economic development corporation is also more likely to have influence with government and industry than individual communities.

Another lesson learned is that the benefits of regional development build up over time, creating wealth that gives a region the flexibility to take advantage of new opportunities, and the resourcefulness to deal with setbacks. That has been the experience for the Inuvialuit, for Nunasi Corporation, the Makivik Corporation and the Alaska North Slope, and for other regions with more recent settled land claims. Whatever problems might arise in the short term, from the longer term the Sahtu could look back and see how far it has come.

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APPENDIX. Development Corporations in Northern Canada and Alaska

This chapter provides descriptions of economic development corporations in regions of the Northwest Territories, northern Quebec, and Labrador with settled land claims. Economic development efforts in regions without settled land claims and pan-territorial development corporations are also examined. Yukon and Alaska are included in the scan, for a total of sixteen regions in all.

Inuvialuit Regional Corporation

The Inuvialuit Final Agreement (IFA) was signed in 1984 and subsequently brought into law by the Government of Canada through the Western Arctic (Inuvialuit) Claims Settlement Act that same year. It was the first comprehensive land claim agreement signed north of the 60 th parallel and only the second in Canada at the time. The IFA gave the Inuvialuit ownership of 91,000 square kilometers of land, including 13,000 square kilometers with subsurface rights to oil, gas and minerals. Financial compensation from the Canadian government totaled $169,500,000 over 14 years. There are approximately 4,000 Inuvialuit beneficiaries in the six communities within the Inuvialuit Settlement Region (ISR).

The Inuvialuit Regional Corporation (IRC) oversees the political, social, and economic affairs of the Inuvialuit, with input from six Community Corporations. The mandate of the IRC is to continually improve the economic, social, and cultural well-being of the Inuvialuit. The corporate goals of the IRC include: the preservation and growth of the financial compensation flowing from the Final Agreement; the distribution of accumulated wealth to beneficiaries; and the provision of technical and administrative support to community corporations and beneficiaries.

The IRC is the sole shareholder in the Inuvialuit Development Corporation (IDC), which is responsible for economic development activities in the Inuvialuit Settlement Region. IDC is the sole owner and/or majority partner or minority investor in various joint ventures totaling more than 20 companies.

IDC is the largest of four income-generating subsidiaries which make up the Inuvialuit Corporate Group. The other three are the Inuvialuit Investment Corporation (IIC), responsible for managing an investment portfolio that provides revenue for a range of programs; the Inuvialuit Petroleum Corporation (IPC), which has a one-third ownership in

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the Ikhil Natural Gas Project; and the Inuvialuit Land Corporation (ILC), responsible for land use permits, leases, and related matters.

The 25 th anniversary of the Inuvialuit Final Agreement was 2009, the most recent year for which financial information is available. In 25 years the net worth of the Inuvialuit Corporate Group has more than doubled, in spite of recent losses caused by the global recession, to $362.5 million.

Inuvialuit Development Corporation The first annual report of the IRC, for 1984, described the Inuvialuit Development Corporation as the vehicle by which the Inuvialuit would achieve greater self-sufficiency through sound economic and business ventures:

“The overall goal of the Inuvialuit Development Corporation is to establish a stable, long-term economic base which will allow the Inuvialuit to contribute to and benefit from the regional and national economy. Some of the benefits to be gained include:

economic growth through investment and profit

improvement of regional services

greater long-term opportunities for employment and training

a more stable economy through recycling of profits and wages through this region.”

The Inuvialuit Development Corporation is an aboriginal birthright development corporation, a 100% Inuvialuit-owned holding company. Its role is to:

evaluate investment opportunities;

monitor and maximize investment in the NorTerra Group of companies, which IDC owns in partnership with Nunasi Corporation of Nunavut; and

seek ways to grow and diversify the IDC portfolio within the Inuvialuit Settlement Region.

IDC conducts its business through more than 20 subsidiaries and joint ventures in five business sectors: energy services, transportation, manufacturing and industrial, northern services, and environmental services, and property management and real estate. From its headquarters in Inuvik, IDC maintains the majority of its assets in the Northwest Territories, and the remainder in southern Canada. “IDC is the economic and employment

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engine for IRC. It generates wealth through continued investment activity; it increases Inuvialuit human resource capacity through formal career development and advancement programs; and it protects and secures IRC’s future through formal business planning, new venture formation and portfolio management.”

FIGURE A-1 Inuvialuit Development Corporation Main Holdings

Sector

Companies

Services

Energy Services

Akita Equtak Drilling Ltd.

50/50 equity joint venture between IDC and Akita Drilling, providing drilling services and crews in the Arctic onshore and offshore and outside the NWT

 

Arctic Oil and Gas Services Inc. (AOGS)

Catering and camp support services to exploration companies. 85% of employees are Inuvialuit beneficiaries

 

IEG Consultants Ltd.

Environmental and engineering services. Joint venture between IDC and Klohn Crippen Berger Ltd.

 

Inukshuk Geomatics Inc.

Engineering and land surveying, land and project development, training surveyors IDC partnership with Challenger Geomatics Ltd.

 

Inuvialuit Oilfield Services (IOFS)

Services for the full well lifecycle, from seismic acquisition to well completions, testing, etc. Joint venture with Schlumberger Canada Ltd.

Transportation

Aklak Air

Regional air carrier

 

Aurora Expediting Services Ltd.

Air cargo and aircraft ground handling and delivery services. Joint venture partner with Braden-Burry Expediting

 

Braden-Burry Expediting

Air cargo and aircraft ground handling, freight forwarding and related services.

 

Canadian North

National air carrier

 

Northern Transportation Company Ltd. (NTCL)

Inland and marine barge services to NWT and Nunavut communities and industry.

Manufacturing

Dowland Contracting Ltd.

Major construction and project management in the NWT and elsewhere, including Alaska

and Industrial

 

Northern Industrial Sales

Industrial supplies and equipment

 

Mackenzie Integrated Tubular Solutions (MITS)

Full range of pipe products and services. Joint venture between IDC, NTCL and Hallmark Tubulars Ltd.

 

Weldco Companies

WDM, Weldco Hydra-lift, Weldco Heavy Industries

Northern Services

Nasittuq

Entry level and trades training for land claim beneficiaries in northern Canada

 

Stanton Group Ltd.

Food distribution and store operations, camp provisioning and catering onshore and offshore

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Tundra Communications

Telecommunications services in ISR— partnership between IDC and Northwestel

Management and

IDC Properties

Office, commercial, and residential buildings for rent in the ISR

Real Estate

 

NorTerra Inc.

Management and holding company; IDC and Nunasi Corporation are equal owners.

The NorTerra Group of companies includes major corporations and significant regional services that meet fundamental regional needs and operations beyond the ISR. These companies include:

the Northern Transportation Company Ltd., acquired in 1985 from the Government of Canada in partnership with Nunasi Corporation (the founding acquisition of the NorTerra Group);

Canadian North, a mainline air carrier serving northern and southern Canada;

Stanton Distributing, a regional grocery store and food distribution company;

IDC Properties, a property management company;

Aklak Air, a regional air carrier;

Arctic Oil and Gas Services (AOGS), providing catering, fuel, and other camp services for the Oil and Gas industry, 85% of whose employees are Inuvialuit; and

Dowland Contracting Ltd., with recent contracts to build the “super school,” the Western Arctic Research Centre, GNWT office building, and IDC/Coast Guard building in Inuvik, and construction projects elsewhere.

Inuvialuit Investment Corporation The Inuvialuit Investment Corporation is responsible for managing an investment portfolio of stocks and bonds. This portfolio was established with the federal monies paid out as part of the Inuvialuit Final Agreement. Its mandate is to achieve the highest possible returns using conservative investment strategies and to increase financial resources to benefit future generations of Inuvialuit.

IIC’s specific objectives are to: protect the value of the investment funds; earn a before-tax real rate of return of 5% over the long term; and manage investment funds on behalf of other members of the Inuvialuit Corporate Group, the Inuvialuit Harvesters Assistance Trust, and the Community Corporations.

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The earnings from the investment portfolio support various obligations under the IFA:

funding to operate the Community Corporations; a share of the annual distribution to beneficiaries; management fees to IRC; and other administrative expenses.

Inuvialuit Petroleum Corporation The Inuvialuit Petroleum Corporation was created in 1985 with the objective of becoming a profitable, medium-sized, diversified, and integrated petroleum company. After selling off southern business interests due to exploration inactivity, IPC has invested the proceeds through the Inuvialuit Investment Corporation, waiting for a turnaround in oil and gas exploration. IPC also has one-third ownership in the Ikhil/Inuvik Natural Gas Project, which supplies natural gas to Inuvik for power and heating. The project is owned equally by IPC through its subsidiary Ikhil Resources Ltd., AltaGas Services Inc., and Enbridge Inc. IPC contributed approximately $14 million towards the $44 million project.

Inuvialuit Land Corporation The Inuvialuit Land Corporation holds title to Inuvialuit lands. It is considered to be a revenue-generating subsidiary of the IRC, although revenues are small and not reported every year. The ILC generates revenues through granting oil and gas concessions on Inuvialuit lands.

Inuvialuit Corporate Group Financial Performance 2005-2009 The Inuvialuit Development Corporation had revenues of $221 million in 2009, the worst year of the global recession, when it recorded an after-tax loss of $17.3 million. That represented a major decrease from 2007, when IDC turned a profit of $13 million on revenues totaling $269 million. The Inuvialuit Investment Corporation, on the other hand, recorded net earnings of $26.5 million in 2009, and a net value of $182 million, down from $193.4 million in 2007. Direct benefits to Inuvialuit beneficiaries included $12.6 million in wages, while equity in the Inuvialuit Corporate Group was $362.5 million.

Table 1 summarizes the overall financial operations of the Inuvialuit subsidiaries in the Inuvialuit Corporate Group over the most recent five-year period. The table shows that the Inuvialuit were generating substantial after-tax earnings up until 2008, when the global recession took hold. In spite of the reduced earnings in 2008 and the loss incurred in 2009, the minimum cash payout to beneficiaries of $400 was maintained for those years, and was much higher in previous years. (In fiscal year 2000, after-tax earnings reached $52,500,000 and the individual payout to beneficiaries was $850.49.) The individual payouts to

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beneficiaries give every Inuvialuit an incentive to take a serious interest in IRC’s activities in the regional, national, and international economy.

TABLE A-1 Inuvialuit Corporate Group Financial Performance 2005-2009

Year

After Tax

Beneficiary Distribution

Earnings

(Losses)

Total

Individual

Beneficiaries

2009

($17,346,000)

$1,595,600

$400.00

3,989

2008

3,824,000

1,565,000

400.00

3,912

2007

35,179,000

3,816,155

1,001.09

3,812

2006

36,459,000

2,869,470

770.12

3,726

2005

19,545,000

1,744,651

477.99

3,650

   

Direct Benefits to Beneficiaries

 
 

Employee

From ICG

Equity in ICG

Contribution

Wages

Resources

Agreements

2009

$12,629,242

$17,879,299

$362,584,000

$11,000,000+

2008

13,786,608

21,102,222

381,841,000

11,600,000

2007

13,467,600

20,285,992

382,216,000

8,600,000

2006

11,470,148

17,345,371

350,234,000

8,700,000

2005

11,411,625

18,151,624

315,825,000

6,000,000

Direct benefits to beneficiaries have been in the range $17-21 million over the five-year period. Employee wages ranged from $11 million to nearly $14 million annually of that amount. The remainder was expended on a variety of community projects, support for education and elders, and donations of various kinds within the region. Total equity in the Inuvialuit Corporate Group declined somewhat in 2009 from a high in 2007, but remains more than double the original land claims settlement at $362.5 million.

Besides its direct business and investment activities, IRC’s organizational and managerial strengths make it an attractive partner for the federal and territorial governments. Both levels of government have raised the amounts in their contribution agreements recently to support wellness and social development programs and capacity-building efforts in the ISR.

Table 2 breaks down the results for the three profit-earning members of the Inuvialuit Corporate Group for the years 2005-2009. The Inuvialuit Land Corporation seldom reports earnings.

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The table records the impact of the 2007-2009 recession on the revenues, profits, wages

and employment numbers, and donations made by the Inuvialuit Development Corporation

(IDC). IDC had revenues of $221 million in 2009, the worst year of the global recession,

when it recorded an after-tax loss of nearly $15 million. That represented a major decline

from 2006, when IDC turned a profit of more than $19 million. In spite of the recession,

wages paid to beneficiaries remained at nearly $8.7 million in 2009, paid out to 290

beneficiaries, and donations exceeded $700,000.

TABLE A-2

Inuvialuit Subsidiaries Financial Performance 2005-2009

Year

 

Inuvialuit Development Corporation

 
 

Revenue

After Tax

Wages Paid to Beneficiaries

Beneficiaries

Donations

Profit (Loss)

on Payroll

2009

$221,146,000

($14,995,000)

$8,690,502

290

$732,000

2008

309,396,000

2,713,000

10,020,000

391

467,000

2007

268,984,000

13,115,000

9,970,000

430

1,114,000

2006

229,314,000

19,403,000

8,400,000

Not reported

1,400,000

2005

187,605,000

8,346,000

Not reported

200 full-time

1,600,000

equivalent

positions

 

Inuvialuit Investment Corporation Heritage Fund

Inuvialuit Petroleum Corporation

 

Net Market

Profit (Loss)

Return

Target

Portfolio

Earnings

Value

(4-yr

IIC/Ikhil*

avg)

2009

$181,926,000

($6,380,000)

3.0%

3.1%

Earnings

$89,000

down

2008

146,932,000

1,904,000

0.8%

1.2%

Earnings

1,387,000

down

2007

197,860,000

9,275,000

10.3%

10.6%

Not reported

2,975,000

2006

195,000,000

10,505,000

14.1%

12.4%

Not reported

2,975,000

2005

176,300,000

7,969,000

10.8%

11.3%

Not reported

Not reported

* Following the sale of IPC’s southern business interests, the proceeds were invested in IIC. IPC also owns

a one-third share in the Ikhil Natural Gas Project which supplies Inuvik.

 

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The Heritage Fund managed by the Inuvialuit Investment Corporation, the returns from which fund the administration of the Inuvialuit Regional Corporation and the community corporations and other expenses, recorded a decline in earnings to $1.9 million in 2008 and a loss of $6.4 million in 2009, well down from the typical earnings of previous years in the $8 to $10 million range. Benchmarks for earnings set on a four-year evaluation period were also brought down sharply for 2008 and 2009. Close monitoring of investments, however, has kept the rates of return close to, or above, the targets.

The slowdown in oil and gas exploration prompted the Inuvialuit Petroleum Corporation to sell off southern business interests several years ago and invest the proceeds through IIC pending better opportunities. Portfolio earnings for the Inuvialuit Petroleum Corporation are not reported separately from the IIC returns.

Spinoff Benefits The managerial expertise and financial capacity of the IRC, combined with its legal authority and political reach, make it an attractive partner for major corporations, investors, and government program managers. Between 2005 and 2009, government contributions to support IRC programs almost doubled, from $6 million in 2005 to over $11 million in 2009.

The wealth generated by the Inuvialuit subsidiaries enables IRC to be an active partner in the development initiatives of the six Community Corporations in the ISR. For example, the Paulatuk Community Corporation’s Paulatuk Development Corporation has recently expressed an interest in buying a mining camp for lease to Darnley Bay Resources Ltd. and other mining companies. The regional Inuvialuit subsidiaries are investors in, and partners with, community initiatives of this type.

In addition to the direct economic benefits created by the various Inuvialuit businesses, there are spinoff benefits of many types as well, for example:

Environmental backhaul by Northern Transportation Company Ltd. (NTCL) from the communities it serves at discounted rates—cleanup, removal, and sale of domestic recyclable waste material; and training of community residents in handling and disposal of hazardous waste products (16 trainees in Tuktoyaktuk in 2010).

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Career exposure through the Annual IDC Arctic Youth Leadership Expedition: Inuvialuit youth toured NTCL and other Inuvialuit businesses in Hay River in 2010 to gain awareness of career, education and training opportunities.

Corporate donations by Inuvialuit businesses for social and charitable purposes.

Flexibility in asset management: The Inuvialuit Petroleum Corporation sold off southern assets in 2007 in response to the downturn in oil and gas activity, and invested the cash from the sale in the Inuvialuit Investment Corporation pending a return to opportunity in the resource sector.

Gwich’in Region

The Gwich’in Comprehensive Land Claim Agreement was signed in 1992 and brought into law by the Government of Canada through the Gwich’in Land Claim Settlement Act that same year. The Gwich’in Settlement Region consists of the Gwich’in Settlement Area in the Mackenzie Valley of the Northwest Territories and Primary Use and Secondary Use lands in Yukon. The Final Agreement gave the Gwich’in Tribal Council ownership of 16,264 square kilometers of land in parcels located throughout the Gwich’in Settlement Area (GSA) and Yukon. On the parcels of Gwich’in-owned land within the GSA, the Gwich’in have either surface rights or subsurface rights, or both. There are more than 2,400 Gwich’in beneficiaries in the four communities within the Settlement Area. The beneficiaries are referred to as Participants.

The Final Agreement provided tax-free capital transfers in annual installments totaling $141 million over 15 years, less repayment of the negotiation loans of $8.1 million. The final payment in 2007 resulted in a net balance in the Gwich’in Settlement Fund, called Gwich’in Legacy Capital, of $134.7 million. This amount exceeded the original fund objective of $132 million.

A fundamental objective of the Gwich’in Comprehensive Land Claim Agreement (GCLCA) is to encourage the self-sufficiency of the Gwich’in and to enhance their ability to participate fully in all aspects of the economy. Consequently, one of the objectives of the Gwich’in Tribal Council is to develop and promote economic, social, educational and cultural programs that will enable the Gwich’in to become self-sufficient and full participating members in the global economy.

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Gwich’in Development Corporation The Gwich’in Development Corporation (GDC) is 100% owned by the Gwich’in Tribal Council. The GDC is an investment company with two goals:

To increase revenues through development activities within the Gwich’in Settlement Region; and

To ensure that Gwich’in beneficiaries are involved in training, employment and business opportunities created from these activities.

Joint venture partnerships with experienced companies eager to work in the Settlement Area are the key to achieving these goals. The joint ventures combine outside expertise with Gwich’in traditional knowledge and experience of geography and culture. “We look for partnerships that promise to deliver profits for both partners, training for our people and sustainable development for our land.”

The GDC currently has investments in five strategically important regional industries:

construction, real estate, hospitality, transportation, and the energy sector, chiefly oil and gas exploration and development. The Gwich’in share in these ventures ranges from 100% ownership to majority or minority participation. Partners include other northern aboriginal ventures, such as the Denendeh Development Corporation, and southern corporations. Head offices for these ventures may be located in the GSA or in southern Canada.

The GDC Annual Report for 2009-2010 reports investments in twelve subsidiaries, not all of which are active, due to the downturn in oil and gas exploration and continuing uncertainty over the Mackenzie Valley Pipeline project. These subsidiaries employ approximately 75 full-time and 30 seasonal workers. Most of them are Gwich’in beneficiaries.

GDC investments as of 2009 were: 44% in Portfolio Investments (promissory notes, debentures and advances); 42% in Hospitality and Real Estate; 12% in Construction and Transportation; and 2% in Energy Development.

The Gwich’in Land Claim Agreement gives Gwich’in businesses preferential access to tenders and contracting opportunities when the federal and territorial governments undertake projects on Gwich’in lands. Private corporations require permission from the

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Gwich’in Tribal Council before they can undertake projects on Gwich’in lands. These measures seek to maximize local and regional opportunities for Gwich’in businesses and employment for Gwich’in beneficiaries.

FIGURE A-2 Gwich’in Development Corporation Main Holdings

Industry/

Services

Gwich’in

Dec. 31, 2009

Corporation

Share

 

Revenue

Profit

   

($)

(Loss)

Construction

       

Gwich’in MAC Ltd.

Pipeline construction

100%

--

($4,898)

Bob’s Welding & Heavy Equipment Repairs Ltd

Welding, HE repairs, rock crushing, transport & barging

51%

3,660,652

(264,354)

GTM Enviro Services Ltd

Brushing & landscaping, strata maintenance

100%

24,385

(191,980)

Energy Development

       

Aadrii Limited

Recover and distribute diesel generated heat Ft McPherson

50%

217,890

112,729

Gwich’in Ensign Oilfield Services Inc.

Drilling, well services, testing

51%

Inactive

--

Mackenzie Valley Aboriginal Pipeline Corp.

 

33.3%

--

--

Real Estate

       

GDC-NNP Limited

Residential, commercial, & industrial property development

50%

Not

(250,000)

Partnership

reported

Inuvik Commercial Properties Zheh Gwizu

Commercial, retail, and office property management (Inuvik and Yellowknife)

37.5%

4,500,000

$1.0 m

($416K

 

distrib)

Hospitality

       

Inuvik Capital Suites Zheh Gwizu

Executive suites

37.5%

2,000,000

$64,306

($80K

 

distrib)

Larga

Medical boarding home & transportation

37.5%

2,227,463

$22,100

MG Lodging Inuvik Ltd.

Full service industrial camp

33.3%

76,214

($33,190)

Transportation

       

Gwich’in Helicopters Ltd.

Flight services, management & operations support

51%

515,481

$58,544

Due to the global recession, GDC assets decreased from $49.8 million in 2008 to $36.5 million in 2009. Shareholder equity dipped slightly over the same period from $2.2 million to $2.1 million, and revenues decreased from $6.6 million in 2008 to $5.9 million in 2009. A small loss in 2009 followed a larger one of more than $6 million in 2008. Given the uncertain economic environment and delays in the Mackenzie Valley Pipeline Project, the GDC is looking for investment opportunities outside the GSA.

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Gwich’in Settlement Corporation The Gwich’in Settlement Corporation is the investment arm of the GTC, established pursuant to Chapter 7 of the GCLCA. The Gwich’in Settlement Corporation (GSC) is responsible for receiving and investing the majority of the capital transfer payments from the federal government. Beginning in 1992, these funds were invested in a portfolio of short-term investment certificates. This strategy was later amended to include investment in Canadian bonds and later still to include global equities.

Management of the funds has been delegated to several banks and asset management firms, with oversight from an Investment Committee responsible for an investment policy. An independent investment advisor measures performance results monthly and formally reviews results every three months. The fund slightly underperformed benchmarks set for it over the four-year period ending in 2010. The revenue generated from these investments supports the administration of the Gwich’in Tribal Council, the four designated Gwich’in community councils, and capital distributions to beneficiaries. Since 1996, the fund has returned approximately 6.4%, beating the policy benchmark by 0.2%. However, the Gwich’in Legacy Capital stood at $115.3 million in 2010, representing a shortfall from the inflation-adjusted level of $139.5 million.

Gwich’in Business Development Department The Gwich’in Business Development Department, based in Fort McPherson, administers the Gwich’in Business Policy. The goals of the Policy are to:

Develop Gwich’in competencies, skills, and expertise;

Ensure that economic opportunities are offered to Gwich’in;

Encourage meaningful participation by Gwich’in in all aspects of the economy; and

Increase Gwich’in wealth and self-sufficiency.

The Policy provides preferential access to Gwich’in-owned businesses to ensure full participation in the regional economy and receive maximum benefit from business and government within the GSA and Settlement Lands. The Policy is meant to ensure that external businesses in the resource development sector have a clear understanding of their responsibilities when doing business in the GSA. The goal is for Gwich’in beneficiaries and communities to become economically self-sufficient, while individuals develop business, administrative, and management skills and resources.

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All Registered Gwich’in Businesses must agree to follow the Gwich’in Business Policy. They must be legitimate Gwich’in enterprises able to supply all goods and services on a competitive and timely basis. They must also be able to meet all technical, qualification criteria, health, safety, and environmental standards. A business that is not a Registered Gwich’in Business requires the approval of the Gwich’in Tribal Council before it can do business on Gwich’in Lands.

The Gwich’in community councils undertake local economic development initiatives. In Fort McPherson, the Tetlit Gwich’in Council owns the Rat River Development Corporation Ltd. (RRDC). The RRDC has its own board of directors appointed with a mandate to pursue business interests separate from the Council’s political activities. RRDC has three wholly- owned local companies, majority ownership in one other, and a minority interest in an environmental engineering and consultancy partnership with Golder Associates Ltd.

Spinoff Benefits The revenue generated from Gwich’in investments and business activities provide support for a variety of social programs for beneficiaries:

Emergency Assistance Fund;

Bereavement Assistance Fund;

Transportation assistance;

Cultural initiatives;

Community events;

Youth initiatives;

Sports and curling.

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Tlicho Region

The Tlicho Land Claims and Self-Government Agreement was signed in 2003, exactly 82 years after the signing of Treaty 11 in 1921. It is the first combined comprehensive land claim and self-government agreement in the Northwest Territories, and the second in Canada. The Government of Canada ratified the Tlicho Agreement in 2005 with the passage of the Tlicho Land Claims and Self-Government Act.

The Tlicho Agreement created the Tlicho Government and gave the Tlicho ownership of 39,000 square kilometers of land in a single block, including surface and subsurface rights. The settlement includes payment by the federal government of $152 million in annual installments over 14 years, less negotiation loan repayments of $28 million over six years. The Tlicho also receive a share of resource royalties annually from development in the Mackenzie Valley.

The Economic Measures chapter in the Tlicho Agreement identifies two objectives:

to maintain and strengthen the traditional economy of the Tlicho First Nation; and

to achieve economic self-sufficiency for the Tlicho Nation.

The Tlicho Government supports the traditional economy and promotes the marketing of renewable resource products and locally manufactured goods. It also assists in the development of commercially viable businesses and enterprises by Tlicho citizens, and where necessary identifies possible sources of financial assistance. It also provides business and economic training and educational assistance to Tlicho citizens to help them participate in the northern economy, and encourages employment of Tlicho citizens in the public and private sectors, with an emphasis on pre-employment training in basic skills.

A Strategic Economic Development Investment Fund of $5 million was established, separate from the other funding paid by the federal government. This funding is earmarked for economic development of Tlicho citizens and the Tlicho Government and the training and education of Tlicho citizens.

Tlicho Investment Corporation The Tlicho Government took over all the corporations that were once owned by the individual bands and the Dogrib Treaty 11 Council, including the community-owned development corporations in the four Tlicho communities. The TG now owns over 40

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companies. The Tlicho Investment Corporation (TIC), established in 2005, is wholly owned by the Tlicho Government. The TIC operates as a sole proprietor and as a partner in joint ventures.

The Tlicho Investment Corporation Administration Law (2006) makes the TIC “the main corporate instrument of the Tlicho Government… responsible for the holding, management and oversight of Tlicho Government corporations, shareholdings and other business interests and entities.” The TIC is accountable to the Chiefs Executive Council of the GN. Its purpose, and its main objectives, are to:

Operate, manage and oversee its active businesses;

Act as the holding company for its subsidiaries, interests, and entities; and

Exercise supervisory powers over its subsidiaries, interests and entities.

A Tlicho entity is a corporation with more than 50% ownership by Tlicho citizens or the

Tlicho Government.

The Board of Directors of the TIC is appointed by the Chiefs Executive Council. The majority of Board members are to be Tlicho citizens, and each of the four Tlicho communities has at least one board member. The chairperson of the Board is to be a Tlicho citizen. The Chiefs Executive Council approves all appointments to the boards of TIC subsidiaries.

The Tlicho Investment Corporation has corporate investments in: construction; human resource services; hydro power; real estate, hotels and travel; and trucking and mining services. These holdings reflect significant needs and opportunities on Tlicho lands (and elsewhere), such as fire fighting services, ice road construction to supply the diamond mines, remediation of old mine sites, and hydro electric development.

The local development corporations offer a wide range of essential community services. An online e-commerce store provides an outlet for Tlicho artists and craftspersons.

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FIGURE A-3 Tlicho Investment Corporation Main Holdings

Industry/

Services

TlC

Corporation

Share

Construction

   

Aboriginal Engineering Ltd

Construction survey, mine construction, environmental remediation and reclamation

100%

Behchoko Development Corporation

 

100%

Lac La Martre Development Corporation

Property management, rental properties, fuel delivery, gas station, heavy equipment rental, home construction, winter road construction

100%

Nishi Khon Forestry

Seasonal firefighting, slashing and brush clearing, clearing right of way

100%

Nishi Khon Freeway

Land development, freight hauling, gravel sales and delivery heavy equipment services, civil engineering construction

100%

Tlicho Road Constructors

Winter road equipment

Behchoko

Dev Corp

Human Resources

   

I&D Management Services

Employment & HR services, Supplies mine workers to Diavik

Aboriginal

partnership

Real Estate, Hotels and Travel

   

Dogrib Nation Trustco

   

Gameti Development Corporation

Gameti motel, Aurora Caribou Camp, Hottah Lake Lodge, fuel

100%

Rae-Edzo Dene Band Development Corporation

Owns and leases office and real estate space in Behchoko

 

Wekweeti Development Corporation

Fuel and freight delivery, taxi, general store, post office, internet service, banking, construction, rental properties, Snare Lake Lodge

100%

Hydro Power

   

Dogrib Power Corporation

Hydro electric power generation and supply

 

Trucking & Mining Svcs

   

Tlicho Domco Inc.

Remote mining camp services

Domco joint

venture

Tlicho Landtran Transport Ltd.

Trucking services, freight mgt and air expediting, ice road construction and transportation to mine sites, hotshot & pilot car, quarrying & rock crushing,

 

Tlicho Logistics

Site services Diavik & Snap Lake, mine remediation, bulk fuel trucking to remote mine sites

100%

TIC places a strong emphasis on training Tlicho citizens. The mandate of Aboriginal Engineering Ltd. includes building the capacity of its aboriginal workforce. AEL typically

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maintains 85% aboriginal employment in large mine construction, remediation and related projects. AEL also has a partnership with Taiga Environmental Laboratory in Yellowknife to train Northern participants as laboratory technicians.

I&D Management Services Ltd., a partnership 100% owned by the Dogrib Nation Trust Co, Yellowknives Deton’Cho Corporation, Denesoline Corporation of Lutsel K’e and the Kitikmeot Inuit Association, provides over 20% of the labour force at the Diavik Diamond Mine. Nearly one-quarter of I&D’s employees have participated in Diavik training programs.

The Tlicho Agreement provides for preferential contracting by the federal and territorial governments to maximize local, regional and northern employment and business opportunities.

Denendeh Development Corporation

The Denendeh Development Corporation (DDC) was established in 1982 as a not-for-profit corporation owned by the Dene of the Northwest Territories. The DDC is governed by a Board of Directors representing First Nations communities in each of the five Dene regions. Each region has a director, and all directors have an equal vote at Board meetings.

DDC works to create long-term economic self-sufficiency for the Dene. The work of DDC is guided by six governing principles:

Economic development that does not negatively impact the environment;

Integrate and balance activities with the traditional economy and community development;

Human resource development as a main requirement for economic self-sufficiency;

Participation and accountability (membership involvement in planning and accountability through representation on Boards);

Change and flexibility, regular assessment of objectives, directions and activities at all levels to stay current; and

Non-competitive alliances with our regional and community-based aboriginal- owned businesses.

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Over the years DDC built up a diverse portfolio of investments. In 2000, the chiefs of Denendeh approved a new investment structure that resulted in the creation of Denendeh Investments Limited Partnership (DILP) and its general partner Denendeh Investments Inc. (DII). Profit-focused investments are now held within DILP and managed by DII. Ventures with primarily a social, artistic and cultural focus remain within DDC. DDC was instrumental in founding the Northern Aboriginal Business Association in 2007.

DDC has a 50% equal interest in the NWT Metis Dene Development Fund (MDDF). The fund was established in 1991 by the DDC and the NWT Metis Development Corporation, which also owns 50%. The fund provides loans from a $5.8 million portfolio to majority-owned aboriginal businesses. As a commercial lender, the fund has increased Dene access to capital and business expertise. The MDDF was created through an agreement with Industry, Science and Technology Canada’s Aboriginal Economic Program. It’s original mandate of stimulating the growth and development of aboriginal businesses has since been expanded to include the provision of loans and services to all residents of the NWT.

Since MDDF’s inception, it has helped develop nearly 200 business loans and currently has more than 50 clients operating in various sectors: oil and gas, tourism, confectionary, well site office and accommodation rentals, heavy equipment, taxis, mining services and municipal services. As a commercial developmental lender, MDDF is a high end risk taker. Loans policy is to lend up to $275,000 per client, with exceptions up to $350,000.

The Denendeh Development Corporation provides management services to Denendeh Investments Inc.

Denendeh Investments Inc. Denendeh Investments Inc. (DII) has investments in companies engaged in oil and gas drilling, heavy construction, environmental services, communications, power utilities, real estate development and property management. DII intends to be a significant player in the northern economy and to contribute to sustainable economic development in Denendeh. DII is the general partner acting on behalf of the Denendeh Investments Limited Partnership, which owns the investments.

These investments tend to focus on basic services which are needed in every community, like digital communications, which bring medical, educational, banking, business, and general interest services into otherwise unserviced communities. DII is also involved in the

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distribution of electrical power to several small and large communities in more than one region. Cleanup of contaminated mine sites is another area of focus of concern in several regions. Still other DII investments are intended to give aboriginal businesses a stake in megaprojects like the construction of the Mackenzie Valley Pipeline or the all-weather highway into Tuktoyaktuk.

The DII investment model features multiple partnership arrangements with other Dene partners, including some with Inuvialuit, Nunasi, and Yukon Indian partners that go beyond the borders of the NWT. Several of DII’s ventures involve partnerships, including multiple partnerships, with experienced industry players. Virtually all of DII’s ventures are in areas where sophisticated technical, professional, and managerial expertise is needed, and many of them have significant capital requirements.

FIGURE A-4 Denendeh Investments Incorporated Portfolio

Corporation/Services

Partners

DII

Share

Shetah Nabors Limited Partnership

   

Operates 4 drill rigs and 4 service rigs

Shetah Drilling LP and Nabors Canada

51%

Broadband Business Alliance LP/Falcon Communications GP Ltd

   
 

DILP, Tetllit Gwich’in Council, Deline Land Corporation, Deh Cho Economic Corporation, Tlicho Investment Corporation, and Akaitcho Regional Investment Corporation

16.6% of Falcon Communications Group

BBALP contracted SSI Micro to install high speed broadband wireless service to NWT communities

Falcon Communications Group Ltd (general partner responsible for operations)

 

Northern Aboriginal Services Company(NASCo)

   
 

DILP, Yukon Indian Development Corporation, Inuvialuit Development Corporation, and Nunasi Corporation

25%

Ardicom Digital Communications— install and maintain digital communications network in NWT and Nunavut

Northwestel Arctic Cooperatives Limited

33.3%

NASCo-ATCO Frontec Joint Venture

   

Maintenance of Northwestel microwave sites

NASCo & ATCO Frontec Services Ltd

 

Northern Utilities Enterprises Ltd (NUEL)

   

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Electrical power supply and distribution

ATCO Electric Arctic Energy Investors

14%

Aboriginal Contractors Corporation (ACC)

   

Majority owner of Mackenzie Aboriginal Corporation (MAC)

Gwich’in Development Corp

33.3%

Mackenzie Aboriginal Corporation (MAC)—formed to build Mackenzie Valley Pipeline Scoping study for highway construction Wrigley-Tuktoyaktuk

Flint Energy Services, Kiewit, Ledcor, North American Construction Group

 

Mackenzie Environmental Solutions Inc

   

Prevent, remediate, clean up environmental contaminants

Exclusive distribution and sales agreement

51%

for

electrochemical technologies in western

 

Canada with ENPAR Technologies Inc

Denendeh Manor LP

   

Corporate office and apartments

DII

on behalf of DILP

100%

Dehcho Economic Corporation

The Dehcho Economic Corporation (DEC) is a partnership between the Dehcho First nation communities, with representation from Dene and Metis. Each community appoints a representative, and those with Metis Locals decide upon one for both shareholders. Each community and Metis Local holds 10 equal shares. The DEC board of directors has a chairperson, vice-chair and secretary treasurer, and five directors.

The DEC receives its mandate directly from the Dehcho First Nations General Assembly. Reports are provided twice a year, once at the winter leadership meeting and directly to the General Assembly every summer.

The Dehcho Economic Corporation has three roles:

Business Development: Strategic investment in large-scale, large capital projects that may mobilize several communities to benefit from business opportunities.

Partnering with Communities: Assist smaller communities, limited in their funding, human resources and markets, with business development.

Natural Resources Development: Support communities negotiating business development opportunities under Impact Benefit Agreements.

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Through the Board of Directors, DEC provides advice to the Dehcho First Nations on resource development and business opportunities that may be of benefit to the Dehcho region as a whole. Over the past few years, the DEC’s focus has been on pursuing business opportunities, providing advisory services to Dehcho First Nations, and training and educational tools to the member communities.

The economic development model of the Dehcho Economic Corporation takes into account the fact that several of the Dehcho communities are small and isolated, with limited capacity and capital of their own. Participation in the Broadband Business Alliance Limited Partnership, which brought high speed Internet service to NWT communities, was a sound strategic decision by the DEC. The emphasis on advisory services, support for communities negotiating impact benefit agreements, and training and education are also important elements of this model.

FIGURE A-5 Dehcho Economic Corporation Main Holdings

Corporation/Services

Partners

DEC

Share

Ekelu Engineering

   

Surveying, GIS, and engineering

Stewart Weir

51%

Broadband Business Alliance Limited Partnership

   

BBALP and vendor SSI Micro brought high speed broadband service to all unserved communities in the NWT

Denendeh Investments Inc. Akaitcho Regional Investment Corporation. Falcon Communications GP Ltd. was created by the BBALP as its General Partner (Management) to work with SSI Micro on the ongoing provision of new services.

16.6%

Akaitcho Regional Investment Corporation

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The Akaitcho Regional Investment Corporation is the economic development arm of the Dene communities of the Akaitcho Territory. The Investment Corporation is one of the owners of the Broadband Business Alliance, along with six other investment corporations. Operated by Falcon Communications Group Ltd., this service provides broadband wireless Internet connections in remote communities.

The Akaitcho Regional Investment Corporation is a signatory to a Memorandum of Understanding with the NWT Energy Corporation (2003) Ltd. (a subsidiary of the NWT Power Corporation), and the South Slave Metis Economic Corporation, to study the potential for hydro development of the Taltson River. If shown to be feasible, hydro-electric power would be supplied to existing and future mines in the NWT.

Akaitcho Energy Corporation The Akaitcho Energy Corporation (AEC), originally part of the Akaitcho Regional Investment Corporation, is the energy development arm representing the six Akaitcho communities. AEC is one-third owner of Deze Energy Corporation, along with the Metis Energy Company Ltd. (MEC), a wholly owned subsidiary of the NWT Metis Nation, and the NWT Energy Corporation (2003) Ltd. (NTEC03).

The rationale for this venture is that hydroelectricity is the key to the economic future of the NWT. The Deze Energy Corporation’s proposed Taltson Hydroelectric Expansion Project is designed to offer an ongoing source of clean energy to the Ekati, Diavik, Snap Lake and proposed Gahcho Kue mines. The proponents believe that the project would produce more employment opportunities for Northerners and would significantly reduce greenhouse gas emissions. As well, the revenue from sales of hydro power would benefit all Northerners through shared community and government ownership.

NWT Metis Development Corporation

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The NWT Metis Development Corporation is one of the largest tourism owners in the NWT, with ownership in sizeable operations such as Plummer’s Fishing Lodges, operator of seven fishing and hunting lodges.

The Metis Development Corporation holds 50% of the shares in the NWT Metis Dene Development Fund (MDDF), in equal partnership with the Dene Development Corporation. The fund provides loans from a $5.8 million portfolio to majority-owned aboriginal businesses. As a commercial lender, the fund has increased Dene access to capital and business expertise. The MDDF was created through an agreement with Industry, Science and Technology Canada’s Aboriginal Economic Program. It’s original mandate of stimulating the growth and development of aboriginal businesses has since been expanded to include the provision of loans and services to all residents of the NWT.

Since MDDF’s inception, it has helped develop nearly 200 business loans and currently has more than 50 clients operating in various sectors: oil and gas, tourism, confectionary, well site office and accommodation rentals, heavy equipment, taxis, mining services and municipal services. As a commercial developmental lender, MDDF is a high end risk taker. Loans policy is to lend up to $275,000 per client, with exceptions up to $350,000.

North Slave Metis Alliance The North Slave Metis Alliance, formed in 1996, is a non-profit organization whose central mandate is to represent the interests of the direct descendants of the Metis of the North Slave Region. Its objectives include:

To negotiate and implement a land and resources agreement founded on the principles of self-government; and

To promote the educational, economic, social and cultural development of the members of the North Slave Region and Treaty 11 Area.

METCOR Inc. is the economic development arm of the North Slave Metis Alliance (NSMA). It was formed to create business and employment opportunities for the Metis of the North Slave Region. METCOR’s business strategy is to seek joint venture partnerships with reputable companies that seek to expand their operations within the North Slave Region.

These joint ventures, and other associated companies METCOR owns and/or operates, form the basis of METCOR’s subsidiary companies. The METCOR companies provide a

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range of services to the mining industry, creating direct and indirect employment and contracting opportunities for members of the NSMA.

Metcon Construction represents a model for METCOR’s operations. Until 2006, METCOR was partnered with Tercon Construction, which provided project management for mining projects awarded to Metcon Construction. Tercon had 25 years of experience providing rock and earth excavation for the international mining industry. Tercon also provided skills training to ensure that local residents benefited from these contracts with economic and employment opportunities. METCOR repurchased Tercon Construction’s shares in 2006, and now seeks other northern partners in a northern-owned consortium to provide construction services for the northern mining industry.

FIGURE A-6 METCOR Inc.’s Main Holdings

Corporation/Services

Partners

METCOR

Share

Metcon Construction Ltd

   

Civil construction, piping installation, earth moving,

Seeking northern partners (Former partner Tercon Contractors)

100%

Metcrete Services Ltd

   

Shotcrete, concrete and grouting equipment and services for the NWT diamond mining industry

Multicrete Systems Inc

51%

Multicrete 49%

NSM Diamonds Inc

   

Inactive

Seeking partners

 

NSM Industrial Services Ltd

   

Environmental remediation and site reclamation

 

100%

Sodexho Alliance

   

Industrial janitorial services, catering, and laundry services— Ekati Diamond Mine and Stanton Hospital

 

51%

Sodexho 49%

Metcrete Services Ltd.’s partner, Multicrete Systems Inc. of Winnipeg, provides training services. Metcrete Services provides Certified Nozzleman training for its employees and builds northern capacity by having a locally based production facility.

The economic development strategy of the North Slave Metis Alliance and METCOR Inc. is tied primarily to the mining industry of the Northwest Territories. The NSMA has

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participation and environmental agreements with Diavik Diamond Mine and BHP Billiton’s Ekati Mine, and sits on Diavik advisory boards.

Sahtu Region

The Sahtu Dene and Metis voted to approve the Sahtu Dene and Metis Comprehensive Land Claim Agreement in 1993. Parliament then approved the Sahtu Dene and Metis Land Claim Settlement Act the following year. Under the Agreement, the Sahtu Dene and Metis received title to 41,437 square kilometers of land in the NWT, including subsurface rights on 1,813 square kilometers of this land. The Sahtu received financial payments totaling $130 million over fifteen years, less $10.8 million in negotiation loans repayments, and a share of resource royalties paid to governments each year in the Mackenzie Valley. There are approximately 3,000 beneficiaries in the five Sahtu communities.

One of the objectives of the Land Claims Agreement is to encourage the self-sufficiency of the Sahtu Dene and Metis and to enhance their ability to participate fully in all aspects of the economy. Another was to provide them with specific benefits, including financial compensation, land, and other economic benefits.

The Sahtu Secretariat Inc. (SSI) is the coordinating body for seven Land Corporations in the five Sahtu communities. It functions as a point of contact for all government agencies and departments on issues such as education, health, the environment, and economic development. The Secretariat’s mandate is to ensure implementation of programs and services under the land claims agreement for the benefit of the Sahtu people. SSI does not own land. Title to all lands outside of municipalities is vested in the four Dene and three Metis land corporations within the three districts of Deline, Tulita and K’ashsho Got’ine.

Chapter 12 of the Land Claim Agreement speaks to the implementation of economic measures. A memorandum of understanding with the GNWT for the period 2007-2012 establishes a process for improving the participation of Sahtu beneficiary-owned businesses in GNWT contracting within the Sahtu Settlement Area. The desired outcome is for registered Sahtu businesses to be awarded 50% of GNWT contracting by value within the SSA.

Chapter 12 focuses on government economic development programs in the settlement area, to ensure that they take into account the following objectives:

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That the traditional economy should be maintained and strengthened; and

That the participants should be economically self-sufficient.

In support of the second objective, government undertakes to:

Assist in the development of commercially viable businesses and enterprises, and, when necessary, identify possible sources of financial assistance;

Provide business and economic training and educational assistance to participants so that they may be able to participate more effectively in the northern economy; and

Encourage employment of participants in the settlement area, including employment in major projects, in the public service and in public agencies. This requires government to prepare plans for training and employment, recognizing the special need of participants for pre-employment training in basic skills. Government is to review job qualifications and recruitment procedures to remove inappropriate requirements in respect of cultural factors, experience, or education.

Chapter 12 commits the federal and territorial governments to maximize local and regional employment and business opportunities. This effort involves providing opportunities for potential contractors to become familiar with federal government bidding systems and to take advantage of GNWT preferential contracting policies.

Since 2002, the Sahtu Dene and Metis of Tulita have been negotiating with the GNWT and the federal government for a self-government agreement for Tulita, as represented by the Tulita Yamoria Community Secretariat. The Tulita Self-Government Framework Agreement was signed in 2005, and negotiations have since proceeded towards an agreement-in- principle.

Economic Development in the Sahtu Settlement Area Responsibility for business development in the Sahtu communities is held at the community level, through the respective land and investment corporations. With oil and gas exploration active in the region in past years, and the possibility that the Mackenzie Valley Pipeline will eventually be constructed, Tulita Land and Financial Corporation, through its wholly owned subsidiary MacKay Range Development Corporation, has placed

a heavy emphasis on training for oil and gas related jobs, training nearly 50 beneficiaries at

a time, and working with companies such as Kenn Borek Air and Shetah Drilling to provide employment opportunities for beneficiaries.

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Fort Good Hope, Colville Lake, and Norman Wells also participate in the exploration sector

through partnerships with helicopter companies. Construction of the Mackenzie Valley

Pipeline would also spur the Mackenzie Valley Highway Extension project, offering

potential for highway construction contracts in the region.

FIGURE A-7

Sahtu Region Main Holdings by Community

Community Land & Financial Corporations

Subsidiaries/Activities

Products & Services

Colville Lake Ayoni Keh Land Corporation

Behdzi Ahda First Nation Economic Trust

Joint venture partner in K’ahsho Got’ine Helicopters Ltd.

Deline Deline Land Corporation

 

Grey Goose Lodge, Great Bear Lake Outfitters Ltd., 984252 NWT Ltd. Research into Bear River hydro develop- ment (with Sahdae Energy Limited and Tulita Yamoria Community Secretariat)

Fort Good Hope Yamoga Land Corporation

Ne’Rahten Development Ltd.

Residential properties, 2 garages and office building. Joint venture with Great Slave Helicopters, Northwright Airways and EBA Engineering.

Yamoga Energy Services

Joint venture partner with Great Slave Helicopters and Behdzi Ahda First Nation Economic Trust

Fort Good Hope Metis Local #54 Land Corporation

   

Norman Wells Ernie McDonald Land Corp’n

   

Norman Wells Claimant Corporation

Real property development

Offices, RCMP building, residential

Service contracts

Fire Management (GNWT), marine contract (Imperial Oil)

 

Joint ventures (Akita/Sahtu Drilling)

Canadian Helicopters Sahtu Oil Incorporated EBA Engineering Consultants MOU

Tulita Tulita Land and Financial Corporation

MacKay Range Corporation

Joint venture partner in Sahtu Helicopters with Great Slave Helicopters. Equipment leases for oil and gas exploration companies.

Fort Norman Metis Land Corporation

   

The Tulita District Lands Corporations (Tulita Land Corporation, Fort Norman Metis Land

Corporation and Norman Wells Land Corporation) in 2010 reached an agreement with

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Selwyn Resources Ltd. to participate in the exploration and development of Selwyn Chihong Mining’s lead-zinc project at Howards Pass, spanning the NWT/Yukon border.

The Deline Land Corporation had earlier (2008) agreed to allow Solitaire Minerals Corp. to proceed with its drill permitting process in the Great Bear region.

The potential for hydroelectric development is also substantial in the Sahtu. Deline has done work on a mini-hydro project on the Bear River, and Tulita has also taken steps to undertake hydrology studies on the Willow River to determine its feasibility for a small hydro project. Other communities want to explore the potential for similar small hydro development or other alternatives to diesel power generation, including solar or wind energy projects.

The Norman Wells Claimant Corporation is the business arm of the Norman Wells Land Corporation. The NWCC represents the Land Corporation’s regional and territorial business interests. Its economic activities are focused on real estate, service contracts with government, and industrial joint ventures. The Norman Wells Land Corporation is the Board for the Norman Wells Financial Corporation and the Norman Wells Claimant Corporation. Board members, including the president and vice-president, are elected by the Land Claim beneficiaries and the board appoints the other officers.

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Nunasi Corporation

Nunasi Corporation pre-dates the settlement of the Nunavut Land Claims Agreement in 1993. Back in 1976, the Inuit Tapiriit of Canada, now known as the Inuit Tapiriit Kanatami or ITK, created the Inuit Development Corporation as the development arm of the yet to be formed territory of Nunavut. ITK also formed an organization called the Tunngavik Federation of Nunavut (TFN) to negotiate the land claim agreement. Shortly after that, TFN renamed the Inuit Development Corporation Nunasi Corporation.

Nunasi’s purpose was to support Inuit to take a prominent place in the world of Canadian business. Originally, Nunasi Corporation was financed through debt financing secured through the land claim.

In 1985, Nunasi Corporation and the Inuvialuit Development Corporation (IDC) purchased the Northern Transportation Company Limited (NTCL). This acquisition set the stage for Nunasi’s future growth. The Nunasi Board and Executive subsequently established relationships with the three Regional Inuit Associations to work together to benefit all shareholders. In 1992 Nunasi repaid all the monies it had borrowed through the Nunavut Land Claim.

The Nunavut Land Claims Agreement, also referred to as the Nunavut Final Agreement, was signed in May of 1993 by representatives of the Tunngavik Federation of Nunavut, the Government of Canada and the Government of the Northwest Territories. It involves the largest number of claimants and the largest geographic area of any comprehensive claim in Canadian history. There are more than 25,000 Inuit beneficiaries in the Nunavut Settlement Area (NSA). This area represents approximately one-fifth the land mass of Canada, as well as adjacent offshore areas. The Agreement provides the Inuit of the NSA with title to approximately 350,000 square kilometers of land, of which 35,257 square kilometers includes mineral rights. Other benefits included the establishment of the Nunavut territory and government.

Payment of the Capital Transfer from the Government of Canada to the Nunavut Trust was made in 14 annual payments for a total of $1.173 billion, less repayment of negotiation loans of $39.7 million by TFN. The final payment was made in 2007.

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Structure and Holdings Nunasi Corporation is a birthright development company, wholly owned by the Inuit of Nunavut through Nunavut Tunngavik Incorporated. A Board of Trustees oversees the Board of Directors. The Trustees reflect broad representation from the Regional Inuit Associations, their development corporations, NTI, and Nunasi.

“As a development corporation, Nunasi aims not only to earn profits for shareholders but also to enter into business ventures that will directly benefit beneficiaries. These benefits include career and employment advantages as well as education and quality of life opportunities.”

Nunasi operates from offices in Iqaluit and Yellowknife. The Corporation has wholly owned subsidiaries and participates in a large number of varied joint venture partnerships. Nunasi’s major joint venture, NorTerra Corporation, is an equal partnership between Nunasi and the Inuvialuit Development Corporation.

Aboriginal development corporations across northern Canada participate in joint ventures with Nunasi where they have regional importance or national scope. The investment arms of these regional bodies, including the three Regional Inuit Associations of Nunavut, often have extensive investments of their own. The result is a complex web of holdings and relationships. Joint venture activities range from providing essential local services to participation in regional megaprojects, installation and operation of pan-northern tele- communications infrastructure, management of services like the North Warning System on behalf of the Government of Canada and the United States Air Force, participation in a global diamond courier enterprise, or support to the Atlantic offshore oil industry.

By recent count, Nunasi’s wholly owned subsidiaries included seven companies operating retail, helicopter, education and training, and security and related services. Its joint ventures involve companies and groups of companies, some of which operate their own subsidiaries—44 companies in all—for a grand total of 53 subsidiaries on the Nunasi organization chart. These joint ventures include: logistical, construction and mining services; fuel distribution; medical boarding homes in Ottawa, Winnipeg, Edmonton and Yellowknife; engineering design and environmental cleanup; winter road construction; expediting; pharmacy; travel agency; hardware and building supplies and sealift operations; remote site microwave maintenance; digital network service; residential and commercial properties; insurance services; electrical estimating and project management; heavy industrial manufacturing; transportation and other ventures.

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FIGURE A-8 Nunasi Corporation Main Holdings

 

Nunasi Corporation Wholly Owned Subsidiaries

 
 

Company

Products & Services

Arctic Spirit Promotions

Promotional garments and items, logo embroidery

Polar Vision Centres Ltd.

Two optical dispensaries in Yellowknife and Iqaluit for prescription glasses, contact lenses, and sunglasses. Supplies Nunavut communities and Yellowknife.

Nunasi Helicopters Inc.

Charter helicopter service to mining and oil and gas exploration, land and wildlife surveys in Nunavut & NWT

Northern Learning Institute (NWT) Inc.

Education and training services, human resources, career development, media and communications

Academy of Learning

Franchise operation offering computer, office, business, bookkeeping, information technology, and custom designed courses

Genesis Group

Education and human resource consulting services in NWT and Nunavut. Web development and graphic design. Conference and training centre in Yellowknife.

SecureCheck

Full service security firm supplying contract personnel, consulting, risk assessment, training and investigation and pre-employment screening services

 

Nunasi Corporation Joint Ventures

 

Company

Products & Services

Nunasi

Partners

 

Share

Nuna Logistics

Logistical, construction and mining services: pre- strip & open pit mining, site & exploration services, infrastructure planning, runway & all-weather road & winter road construction, crushing, dispatching, heavy equipment operator simulation training etc.

51% (with

49% Nuna

Kitikmeot

Logistics

Corporation)

Mgt Group

Nunavut Petroleum Corporation

Joint venture agreement with Qikiqtaaluk Corporation

51%

49%

Uqsuk Corporation

Joint venture between Nunavut Petroleum Corporation and ATCO Frontec operating under Nunavut Government contract to lease and operate the bulk fuel storage facility and pipeline distribution system in Iqaluit.

   

Larga Baffin

Medical transportation services and boarding home in Ottawa in partnership with Qikiqtaaluk Corporation

50%

50%

Larga Kivalliq Inc./ Kivalliq Development Corporation

Larga Kivalliq Inc. is an equal joint partnership which owns 51% of Kivalliq Development (KDC). KDC operates the Kivalliq Inuit Centre medical boarding home in Winnipeg.

50%

50% Sakku

Investments

Corp.

Larga Ltd.

Nunasi/Kitikmeot Corporation/Gwich’in Develop- ment Corporation joint venture operates medical transportation and boarding home service in Edmonton.

37.5%

37.5% GDC

25% KC

Larga Kitikmeot

Medical boarding home in Yellowknife for residents of the Kitikmeot region. Partnership

50%

50% KC

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Kitnuna Corporation

Fuel distribution, expediting, maintenance contracts, environmental cleanup, and winter road construction(four Kitnuna companies)

50%

50% KC

Kitnuna Expediting Services

Expediting and remote camp support

   

Kitnuna Projects

Multi-disciplinary project management and construction company with focus on environmental cleanup and infrastructure projects

   

Kitnuna Petroleum

Fuel storage and distribution in Cambridge Bay

   

Ltd.

Kitnuna Pharmacy

Joint venture between Kitnuna Corporation and Super Thrifty Pharmacy. Retail and prescription services in Cambridge Bay to the Kitikmeot Region.

Not

Not reported

Ltd.

reported

Numac Development Ltd

Joint venture with TC Enterprises. Owns Bartesco Apartment Building in Yellowknife.

50%

50% TC

Enterprises

Top of the World Travel

Full service travel and tour agency with offices in Yellowknife and Iqaluit. Northern Tours division promotes travel in Nunavut and NWT.

55%

45% KC and individuals

Frobuild (2006) Ltd.

Hardware and building materials supplier in Iqaluit, with packaging and marshalling connections in Valleyfield, QC, during sealift season.

Not

Not reported

reported

Northern Aboriginal Services Company (NASCO)

Ownership is shared with the Denendeh, Yukon Indian, and Inuvialuit development corporations (DDC, YIDC, and IDC). Provides maintenance at 160 remote microwave sites for Northwestel through the NASCO-Frontec joint venture.

25%

25% DDC

25% YIDC

25% IDC

Ardicom Digital Communications Inc.

Operates a digital wide area network (WAN) serving 58 communities across the North on contract to the GNWT and Nunavut, and provides similar services to other pan-northern customers.

33.3%

33.3%

Northwestel

 

33.3% Arctic

Coops

NCC Investment Group Inc.

Holding company for NCC Development, NCC Residential Properties, and NCC Commercial Properties. Develops, owns and leases infrastructure requirements in Nunavut on contract with the federal government.

25%

25% each